An investment firm recommends that a client invest in bonds

An investment firm recommends that a client invest in bonds rated AAA, A, and B. The average yield on AAA bonds is 4%, On A bonds 5%, And on B bonds 8%. The client wants to invest twice as much in AAA bonds as in B bonds. How much should he invest in each type of bond under the following conditions. A. The total investment is $1400, and the investor wants an annual return of $730 on the three investments. B. The values in part A are changed to $24,000 and $1,250 respectively

Solution

Let amt invested in bonds AAA be $x , in A y ,$ in B its $z.

client wants to invest twice as much in AAA bonds as in B bonds.

x=2z ----(1)

a)  total investment is $1400,

x +y +z = 1400 ----(2)

0.04x +0.05y +0.08z = 730 ---(3)

Solve equation (1) , (2) and (3)

b) x+y +z = 2400

0.04x +0.05y +0.08z = 730

x=2z

Solve equation (1) , (2) and (3)

c)

x+y +z = 1250

0.04x +0.05y +0.08z = 730

x=2z

Solve equation (1) , (2) and (3)