Problema Solution
Leticia has been tracking two volatile stocks. Stock A over the last year has increased 10%, and stock B has increased 15% (using a simple interest model). She has $10,000 to invest and would like to split it between these two stocks. If the stocks continue to perform at the same rate, how much should she invest in each to result in a balance of $11,400?
Answer provided by our tutors
Let
a = money invested in Stock A
b = money invested in Stock B
Total money invested is $10,000:
a + b = 10,000
The resulting balance after 1 year is $11,400:
1.10a + 1.15b = 11,400
We need to solve the following system of equations:
a + b = 10000
1.10a + 1.15b = 11400
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click here to see the step by step solution of the system of equations
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a = $2,000
b = $8,000
Leticia invested $2,000 in Stock A and $8,000 in Stock B.