Hey!
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Solution:
Income at 5% for $4,000 (1 year)
= 4,000 x 0.05
= $200
Income at 4% for $3,500 (1 year)
= 3,500 x 0.04
= $140
Total Income: 200 + 140 = $340
Remaining Income: 500 - 340 = $160
Total Invested: 4,000 + 3,500 = $7,500
Remaining Invest: 10,000 - 7,500 = $2,500
Formula: Time × Rate × Time = Interest
Principal: $2,500
Interest: $160
r = rate
time = 1 year
1 × r × 2,500 = 160
2,500r = 16
2,500r/2500 = 16/2,500
r = 0.064
0.064 = 6.4%
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Answer:
The final outcome is that the man has $2,500 at 6.4% interest in order to get $500 of income each year. Therefore, the answer is (e) 6.4%.
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Hope This Helps :)
