If the stocks gained 32% & the bonds gained 16%, how much was invested in each?

Question

An investment portfolio of stocks and bonds, with an initial investment of $120,000, gained $30,800 over its life. 

Answer 1

PROBLEM

 

If the stocks gained 32% & the bonds gained 16%, how much was invested in each?
An investment portfolio of stocks and bonds, with an initial investment of $120,000, gained $30,800 over its life.

 

SOLUTION

 

Set up a system of equations to solve for the amounts invested in stocks and bonds.

 

Let X be the amount invested in stocks and Y be the amount invested in bonds.

 

Therefore, the equation representing the initial investment is: (1) X + Y = 120000

 

Changing the rates of returns to decimal form results in the amount gained: (2) 0.32X + 0.16Y = 30800

 

Now, use substitution or elimination to solve equations (1) and (2) for X and Y.