Algebra expression

Question

Fred invest a total of $20,000 in real estate stocks and technology stocks. At the end of the year, the real estate stock returened 4% and the technology stocks returned %2 on the original investments.How much was invented in each type of stock if the total interest earned was $1,080?

Answer 1

You'll need a system of equations to solve this one.

Let r represent the amount invested in real estate stock and t the amount invested in tech stock.

Then, we know:

(1) r + t = $20000

We also know the total interest earned: $1080

Remember that total interest earned is equal to the rate of interest multiplied by the amount invested (in a simple interest situation). So, for each stock, the interest earned is:

4% * r (for real estate) and

2% * t (for tech)

The total interest for both is the sum of the two:

(4% * r) + (2% * t) = $1080

Rewrite in decimal form:

 

(2) .04r + .02t = $1080

 

Now, using (1) and (2) you can solve for one of the two variables (either r or t) and once you've found that one, plug the value in to (1) to solve for the other.

 

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