How much should she invest into each one?

Question

Julie has $8,000 to invest, and hopes to earn $330 in interest in the first year. She wants her investment in treasury bills to be $3000 less than her investment into corporate bonds. The expected returns (in simple interest) on each investment are: Treasury Bills: 3% Treasury Bonds: 2% Corporate Bonds: 5%

How much should she invest into each one?

$_______________ in Treasury Bills

$_______________ in Treasury Bonds

$_______________ in Corporate Bonds

(thank you in advance!!!!!)

Answer 1

The way to solve this problem is by setting up a system of equations.

Let L be how much she puts in Treasury Bills, let D be how much she puts in Treasury Bonds, and let C be how much she puts in Corporate Bonds.

From the question you know that

1) C - L = 3000

2) C + L + D = 8000

3) (0.03)L + (0.02)D + (0.05)C = 330

Know you can solve your system of equations.

Tip: I suggest multiplying the third equation by 100 on both sides to make things easier

PS. If you ever need more help in this area, it happens to be my specialty!