A retirement fund invests some money in government bonds at $2.5\%$ annual simple interest, and \$5,000 more than that amount in corporate bonds at $4\%$. If the total annual interest earned is \$1,450, how much was invested in each type of bond?

• A. Government bonds = \$24,230.77; Corporate bonds = \$19,230.77
• B. Government bonds = \$19,230.77; Corporate bonds = \$24,230.77
• C. Government bonds = \$18,500.50; Corporate bonds = \$23,500.50
• D. Government bonds = \$23,500.50; Corporate bonds = \$18,500.50

Answer: (B)

Verified step by step guidance

1. Let the amount invested in government bonds be represented by the variable \(x\).
2. Since the amount invested in corporate bonds is \$5,000\( more than the government bonds, express it as \)x + 5000$.
3. Write the expressions for the annual simple interest earned from each investment: for government bonds, it is \$0.025 \times x\(, and for corporate bonds, it is \)0.04 \times (x + 5000)$.
4. Set up an equation for the total annual interest earned by adding the two interest amounts and equate it to \$1450\(: \)0.025 \times x + 0.04 \times (x + 5000) = 1450$
5. Solve the equation for \(x\) to find the amount invested in government bonds, then add \$5000$ to find the amount invested in corporate bonds.