Question

A woman invested $15,000 part in 7% stocks and the remainder in 9% bonds. If her yearly yield from both investments is $1,230.00, how much did she invest at each rate?

Answer 1

Using the simple interest relation, the amount invested in stocks and bond respectively is $15,000 and $2000

Simple interest

• Principal × rate × time

Let her total principal = p

Stock :

• Interest = 15000 × 0.07 × 1 = 1050

Bond :

• Interest = (p - 15000) × 0.09 = 0.09p - 1350

Total interest earned :

1050 + 0.09p - 1350 = 1230

-300 + 0.09p = 1230

0.09p = 1230 + 300

0.09p = 1530

p = $17000

Hence,

Amount invested in stock at 7% = $15000

Amount invested in bond at 9% = $17000 - 15000 = $2000

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