SOLUTION: Devon invested 8,000 in three different mutual funds. A funds containing large cap stock made a 6.9% return in 1yr. A real estate fund lost 12.5% in 1 yr, and a bond fund 4.9 % in
Question 1160356: Devon invested 8,000 in three different mutual funds. A funds containing large cap stock made a 6.9% return in 1yr. A real estate fund lost 12.5% in 1 yr, and a bond fund 4.9 % in 1 yr. The amount invested in the large cap stock fund was twice the amount invested in the real estate fund. If Devon had net return of 191 across all investments, how much did he invest in each fund ? Answer by ikleyn(52794) (Show Source):
Let x be invested in a real estate;
then 2x is invested in large cap stock
and the rest, (8000-x-2x) = 8000-3x is invested at bond fund.
The total return equation is
0.069x - 0.125*2x + 0.049(8000-3x) = 191
Simplify; express x and calculate
x = = 612.80
ANSWER. 612.80 invested in large cap stock; 2*612.80 = 1225.60 invested in real estate and the rest,
8000-612.80-1225.60 = 6161.60 invested in bonds.
CHECK. 0.069*612.80 - 0.125*1225.60 + 0.049*6161.60 = 191.00 is the total return. ! Precisely correct !
Solved.
Notice a remarkable fact: the problem solved using one single equation in one single unknown (!)
It is the major lesson to learn from my solution (!)
