A Retired Woman Has $130,000 to Invest

question 150

Multiple Choice

A retired woman has $130,000 to invest. She has chosen one relatively safe investment fund that has an annual yield of 9% and another, riskier one that has an annual yield of 13%. How much should she invest in the fund yielding 9% if she would like to earn $14,000 per year from her investments? ​

• A)$11,700
• B)$16,900
• C)$57,500
• D)$72,500
• E)$113,100

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Definitions:

Average Total Cost

The total cost of production divided by the total quantity produced, representing the average cost per unit.

Long Run

A time period in economic analysis during which all factors of production and costs can be variable, allowing for full adjustment to changes in market conditions.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent or salaries.