Question

Gilbert plans to invest $14 000 into two types of bonds. one bond yields 8% interest each year and the other bond yields 12% interest each year. he needs to earn $1400 each year to consider the investment successful. how much should he invest in each bond?

Answer 1

invest in each bond = $7000

What is Profit and Loss?

An income statement, also known as a profit and loss account, is one of a company's financial statements and displays the company's receipts and outlays for a specific time period. It explains how revenues are converted into net income or net profit.

According to the given data:

Let n be the amount invested at 8%

the amount invested at 12% would be : 14000-n

so,

8n+12(14000-n) = 1400

8n + 168000 - 12n = 1400 * 100

4n + 168000 = 140000

n = 28000/4

   =  7000

Therefore,

At 12% amount invested

= 14000 - 7000

= $7000

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