Investments

Date: 5/30/96 at 20:40:46
From: Anonymous
Subject: Intermediate Algebra

Nancy Dunn has inherited $80,000 from her uncle.  She invests part of 
the money in a video rental firm which produces a return of 7 percent 
per year, and  divides the rest equally between a tax-free bond at 6 
percent a year and money market fund at 12 percent a year.  Her 
annnual return on these investments is $6800.  How much is invested in 
each?

Date: 5/31/96 at 13:20:59
From: Doctor Anthony
Subject: Re: Intermediate Algebra

Hello.

Let x = amount invested in rental firm
    y = amount invested in tax-free bond
    y = amount invested in money market

Then x + 2y = 80000

Also 0.07x + 0.06y + 0.12y = 6800

Now we have two equations for finding x and y.

   x + 2y = 80000
.07x + .18y = 6800

Solving these gives x = 20,000 and y = 30,000

(Check: .07 x 20,000 + .18 x 30,000 = 6800)

So $20,000 was invested in the video rental firm and $30,000 in each 
of the other two ventures.

-Doctor Anthony,  The Math Forum
 Check out our web site!  http://mathforum.org/dr.math/