How do you solve this absolute value equation
1 answer:
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Answer:
9% fund: $ 210,000
13% fund: $70,000
Step-by-step explanation:
As she wants to have a $28,000 annual return for her $280,000 investment, she is expecting a return rate of 10%:
If we call x the proportion of the capital in the 9% fund, then (1-x) is the proportion of the capital in the 13% fund,and the return of the combination has to be the expected return of 10%:
Then, we know that 75% of the capital should be invested in the 9% fund and 25% in the 13% fund.
This correspond to a capital of:
9% fund: 0.75*$280,000 = $ 210,000
13% fund: 0.25*$280,000 = $70,000