Question

Maricopa's Success scholarship fund receives a gift of $ 190000. The money is invested in stocks, bonds, and CDs. CDs pay 3.5 % interest, bonds pay 4 % interest, and stocks pay 7 % interest. Maricopa Success invests $ 10000 more in bonds than in CDs. If the annual income from the investments is $ 9425 , how much was invested in each account

Answer 1

Answer:

CDs = $55,000

Bonds = $65,000

Stock = $70,000

Explanation:

Given:

Interest rate on CDs = 3.5%

Interest rate on Bonds  = 4%

Interest rate on Stocks  = 7%

Total Interest  from the investments = $9,425

Computation:

CDs + Bonds  + Stocks  = $190,000....................eq1

 Total Interest  from the investments = $9,425

0.035 CDs  + 0.04 Bonds   + 0.07 Stocks   = $9,425..........................eq2

Given:

Bonds = $10,000 + CDs (Putting bonds value in eq1)

CDs +  $10,000 + CDs  + Stocks  = $190,000

2 CDs + Stock = $180,000.......................eq3

(Putting bonds value in eq2)

0.035 CDs  + 0.04 ($10,000 + CDs)  + 0.07 Stocks   = $9,425

0.035 CDs  + $400 + 0.04CDs  + 0.07 Stocks   = $9,425

0.035 CDs  + $400 + 0.04CDs  + 0.07 Stocks   = $9,425

0.075 CDs + 0.07 Stocks = $9,025.....................eq4

From eq 3 and eq 4

CDs = $55,000

Bonds = $10,000 + CDs = $55,000 + $10,000 = $65,000

Stock = $190000 - $55,000 - $65,000 = $70,000