SOLUTION: Mr. Scurtu wants to invest some of his $10,000 in an aggressive stock fund that he expects to earn 12% annually and the rest in less risky bonds making 4% annually. If he hopes to

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Question 1196173: Mr. Scurtu wants to invest some of his $10,000 in an aggressive stock fund that he expects to earn 12% annually and the rest in less risky bonds making 4% annually. If he hopes to earn $1000 in annual interest, how should he split his investment between the stock fund and the bonds?

Found 2 solutions by josgarithmetic, greenestamps:
Answer by josgarithmetic(39617) About Me  (Show Source):
You can put this solution on YOUR website!
One year invest

v at 12%
10000-v at 4%

highlight_green%280.12v%2B0.04%2810000-v%29=1000%29


0.03v%2B0.01%2810000-v%29=250
3v%2B10000-v=25000
2v=25000-10000
2v=15000
v=1500%2A%2810%2F2%29
v=5%2A1500
highlight%28v=7500%29---------at 12%
10000-v=highlight%282500%29-------at 4%

Answer by greenestamps(13200) About Me  (Show Source):
You can put this solution on YOUR website!


Here is a quick and easy non-algebraic method for solving any 2-part "mixture" problem like this.

(1) $1000 interest on a $10,000 investment is a return of 10%
(2) 10% is 3/4 of the way from 4% to 12% (use a number line to see that, if it helps)
(3) Therefore, 3/4 of the total needs to be invested at the higher rate

ANSWER: 3/4 of $10,000, or $7500, should be invested at 12%; the other $2500 at 4%

CHECK: .12($7500)+.04($2500)=$900+$100 = $1000