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Aparty has a $500,000 IRA. How should he divides the money into fund A for 5.2% annually, and Fund B for 7.7% annually, to produce an annual income of $30,000?
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The total amount of money needed to produce an annual income of $30,000 is $415,385. To break this down further, the amount of money invested in each fund should be: Fund A: $167,975 (167,975 x 5.2% = $8,746.20 annual income) Fund B: $247,410 (247,410 x 7.7% = $19,006.77 annual income) Therefore, Aparty would need to invest $167,975 into Fund A and $247,410 into Fund B to produce an annual income of $30,000.
