An investor has $40,000 to invest. He wants to diversify his portfolio by putting dividing the money among stocks, bonds and mutual funds. He has chosen one fund from each type in which to invest. Over the last 10 years the stocks have earned 9.75%, the bonds have earned 5.25% and the mutual fund has earned 7% interest. The investor expects that the funds will all continue to perform in the future similarly to how they have performed over the last ten years. Because he is willing to take some risk, the investor has decided that he will invest twice as much money in stocks as he will in bonds. How much should he invest in each account in order to earn an 8% return on his invest?
