Question: A recently retired couple need $12,000 per year to supplement their Social Security. They have $150,000 to invest to obtain this income. They have decided on two investment options: AA Bonds yielding 10% per annum and a Bank Certificate yielding 5%
a) How much should be invested in each to realize exactly $12,000?
b) If, after two years, the couple requires $14,000 per year in income, how should they reallocate their investment to achieve the new amount?