Question

Mitchell invested $14,000 in stocks and bonds, paying 2.6% and 12% annual intrest respectively. If the total interest earned for the year was $1257, how much was invested in stocks and how much was invested in bonds?

Answer 1

Answer:

Stocks = 4500

Bonds = 9500

Step-by-step explanation:

Given that:

Total interest earned = 1257

Interest rate of stock = 2.6% = 0.026

Interest rate on bond = 12% = 0.12

Total amount invested = 14000

Let amount invested in stock = x

Amount invested in bond = 14000 - x

Using the relation :

Principal * rate * time

Stocks :

x * 0.026 = 0.026x

Bonds:

(14000 - x) * 0.12 = 1680 - 0.12x

0.026x + 1680 - 0.12x = 1257

−0.094x = 1257 - 1680

-0.094x = - 423

x = 423 / 0.094

= 4500

14000 - x = 14000 - 4500 = 9500

Stocks = 4500

Bonds = 9500