document.write( "Question 1161622: A person plans to invest a total of $250,000 in a money market account, a bond fund, an international stock fund, and a domestic stock fund. She wants 60% of her investment to be conservative (money market and bonds). She wants the amount in domestic stocks to be 4 times the amount in international stocks. Finally, she needs an annual return of $10,000
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document.write( "Assuming she gets annual returns of 2.5% on the money market account, 3.5% on the bond fund, 4% on the international stock fund, and 6% on the domestic stock fund, how much should she put in each investment? \n" );
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Algebra.Com's Answer #785226 by ikleyn(52817)![]() ![]() You can put this solution on YOUR website! . \n" ); document.write( " \r\n" ); document.write( "\r\n" ); document.write( "60% of $250000, i.e. $150000, go to the money market and bonds.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "Hence, 40%, or $100000, go to the international and domestic funds.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "These $100000 splits this way: $820000 go to the international and $80000 to the domestic.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "Then these $100000 produce the annual interest of 0.04*20000 + 0.06*80000 = 5600 dollars.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " Thus you reduce the problem to TWO funds ONLY: a money market account and the bond fund \r\n" ); document.write( " with the total amount of $250000 - $100000 = $150000 and the annual interest of $1000 - $5600 = $4400.\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "It can be solved using one unknown x = bonds. You have then this equation\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " 0.025*(150000-x) + 0.035*x = 4400\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( "The solution to it is\r\n" ); document.write( "\r\n" ); document.write( "\r\n" ); document.write( " x =\r \n" ); document.write( "\n" ); document.write( "Solved, answered, explained and completed.\r \n" ); document.write( " \n" ); document.write( " \n" ); document.write( "\n" ); document.write( " \n" ); document.write( " |