Question

You inherit $10,000 with the stipulation that for the first year the money must be invested in two stocks paying 6% and 11% annual interest, respectively. How much should be invested at each rate if the total interest earned for the year is to be $900

Answer 1

Answer:

5000 at 6%

6000 at 11%

Explanation:

Given that :

Total principal = 10000

Let :

Principal invested in business A = x

Principal invested in business B = y

Interest = Principal * rate * time

(x * 6% * 1) + (y * 11% * 1) = 900

0.06x + 0.11y = 900 - - - - (1)

x + y = 10000 - - - (2)

From (2)

x = 10000 - y

Put x = 10000 - y in (1)

0.06(10000 - y) + 0.11y = 900

600 - 0.06y + 0.11y = 900

600 + 0.05y = 900

0.05y = 900 - 600

0.05y = 300

y = 300 / 0.05

y = 6000

x = 10000 - y

x = 10000 - 6000

x = 5000