Question

you have 750,000 at time you retire. You have the option of investing this money in two funds. Funds A pays 1.9 annualy and Fund B pays 6.9 annually. How should you devide the money between A and B to produce annual interest income of $42,750

Answer 1

Since the target annual interest income is constant, we will assume that the interest is not being compounded continuously, and that it is calculated by
Interest=P*R*T
Let the amount deposited in account A be a, and thus the amount in B is (750,000-a).
We then get the equation:
42750=a*(1.9/100)*1+(750000-1)*(6.9/100)*1
Solving for a should give the amount deposited in A.

Answer 2

99