SOLUTION: $100,000 is invested in stocks and bonds. bonds earn 4%, and stocks earn 7%. if the combination of investments earns 6.2%, how much was invested each in bonds and stock?
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Question 1139820: $100,000 is invested in stocks and bonds. bonds earn 4%, and stocks earn 7%. if the combination of investments earns 6.2%, how much was invested each in bonds and stock? Answer by greenestamps(13200) (Show Source):
Traditional algebraic method for solving "mixture" problems like this....
x = amount at 4%
100000-x = amount at 7%
The total earnings was 6.2% of the $100000:
A simple linear equation; complicated a bit by the decimals. But the process for solving the equation from there is straightforward.
Here is a much easier way to solve this kind of problem, if you understand it....
(1) Find where the 6.2% earning rate lies between 4% and 7%.
7-4 = 3; 6.2-4 = 2.2; 2.2/3 = 22/30 = 11/15.
(2) 6.2% is 11/15 of the way from 4% to 7%; that means 11/15 of the total was invested at the higher rate.
ANSWER: 11/15 of the $100,000 in stocks; 4/15 of the $100,000 in bonds.
You can find the actual numbers if you need to; the problem is not very well formulated, because the two amounts turn out not to be whole numbers of dollars or even whole numbers of cents.
