a retired couple have $300,000 to invest and want to earn $30,000 per year in interest. the safer investment yields 9.5%, but they can supplement their earnings by investing some of their money at 11%. how much should they invest at each rate to earn $30,000 per year?

According to the expenditure of retired couple 0.095x + 0.11(300000 - x) = 30000 would be investment at each rate to earn $30,000 per year.

What is Compound Interest ?

Compound interest, also known as interest on principle and interest, is the practice of adding interest to the principal amount of a loan or deposit. It occurs when interest is reinvested, or added to the loaned capital rather than paid out, or when the borrower is required to pay it, so that interest is generated the next period on the principle amount plus any accrued interest. In finance and economics, compound interest is common.

In contrast to simple interest, which does not compound since past interest is not added to the principal for the current period, compound interest allows interest to build over time. The interest per period multiplied by the number of periods in a year yields the simple annual interest rate. The nominal interest rate is another name for the basic annual interest rate.

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