Jane Hooker invests 40 000 received as an inheritance in th

Jane Hooker invests $ 40, 000 received as an inheritance in three parts. With one part she buys mutual funds that offer a return of 2 percent per year. The second part, which amounts to twice the first, is used to buy government bonds paying 2.5 percent per year. She puts the rest of the money into a savings account that pays 1.25percent annual interest. During the first year, the total interest is $825. How much did she invest at each rate?

Solution

Total investment = $ 40,000

Mutual Funds : Lets assume she invets $x in M.F.

Interest = x(2/100) = $0.02x

Govt. Bonds: twice of M.F. = 2x

Interest = 2x(2.5/100) = 0.05x

Saving Accounts : Remianing = 40000 - 3x

Interest = ( 40,000 -3x)(1.25/100) = 500 - 0.0375x

Total intersesterned in one year = $ 825

So, 0.02x + 0.05x + 500 - 0.0375x = 825

0.0325x = 325

x = $ 10000 M.F. @ 2% rate

2x = $ 20,000 Govtt Bonds @ 2.5% rate

Remaining =$ 10,000 saving acc. @ 1.25% rate