Problema Solution
Jane Hooker invests $40,000 received as an inheritance in three parts. With one part she buys mutual funds that offer a return of 2% per year. The second part, which amounts to twice the first, is used to buy government bonds paying 2.5% per year. She puts the rest of the money into a savings account that pays 1.25% annual interest. During the first year, the total interest is $825. How much did she invest at each rate?
Answer provided by our tutors
Let
x = the money invested in mutual funds that offer a return of 2% per year. x>=0
2x = the money used to buy government bonds paying 2.5% per year
40,000 - (x + 2x) = the rest of the money put on savings account that pays 1.25% annual interest
During the first year, the total interest is $825 means:
0.02x + 0.025*2x + 0.0125*(40,000 - (x + 2x)) = 825
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click here to see the equation solved for x
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x = $10,000
$10,000 were invested in mutual funds that offer a return of 2% per year.
2*10,000 = $20,000 were used to buy government bonds paying 2.5% per year.
40,000 - (10,000 + 20,000) = $10,000 the money in the saving account that pays 1.25% annual interest.