SOLUTION: An investment company recommends that a client invest in AAA, AA, and A rated bonds. The average annual yield on AAA bonds is 6%, on AA bonds 7%, and on A bonds 10%. The client t

Algebra ->  Matrices-and-determiminant -> SOLUTION: An investment company recommends that a client invest in AAA, AA, and A rated bonds. The average annual yield on AAA bonds is 6%, on AA bonds 7%, and on A bonds 10%. The client t      Log On


   

Question 1114606: An investment company recommends that a client invest in AAA, AA, and A rated bonds. The average annual yield on AAA bonds is 6%, on AA bonds 7%, and on A bonds 10%. The client tells the company she wants to invest twice as much in AAA bonds as in A bonds. How much should be invested in each type of bond under the following conditions? The total investment is $50,000 and the investor wants an annual income (that is, earned interest) of $3, 620.
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Answer by greenestamps(13215) About Me  (Show Source):
You can put this solution on YOUR website!


The amount invested in A bonds at 10% yield is x; the amount invested in AAA bonds at 6% yield is 2x; the rest, $50,000-3x, is invested in AA bonds at 7% yield.

The total income from the investments is $3620.

.10%28x%29%2B.06%282x%29%2B.07%2850000-3x%29+=+3620

You can solve that with simple algebra....