Math Problem Statement
Country Day's scholarship fund receives a gift of $ 135000. The money is invested in stocks, bonds, and CDs. CDs pay 4.25 % interest, bonds pay 2.4 % interest, and stocks pay 8.7 % interest. Country day invests $ 15000 more in bonds than in CDs. If the annual income from the investments is $ 8112.5 , how much was invested in each vehicle?
Solution
Let's define the amounts invested in CDs, bonds, and stocks as follows:
- Let represent the amount invested in CDs.
- Since the amount invested in bonds is $15,000 more than the amount invested in CDs, the amount invested in bonds will be .
- The total investment is $135,000, so the amount invested in stocks will be the remaining amount, which is .
The income from each investment is the principal amount times the respective interest rate:
- The CDs generate an income of .
- The bonds generate an income of .
- The stocks generate an income of .
The total income from all investments is $8,112.50, so we can set up the following equation:
Now, we will solve this equation step by step.
Step 1: Expand the equation
First, expand all the terms:
Step 2: Simplify the terms
Now combine like terms:
Step 3: Solve for
Now isolate :
Step 4: Find the amounts invested in bonds and stocks
- The amount invested in CDs is .
- The amount invested in bonds is .
- The amount invested in stocks is .
Final Answer:
- CDs: $15,700
- Bonds: $30,700
- Stocks: $88,600
Would you like further clarification or details on any step?
Here are 5 related questions for further exploration:
- How would the total income change if the interest rates for bonds were increased by 1%?
- What would happen if the total investment amount were decreased by 10%?
- How can you verify that the total interest income matches the given income of $8112.5?
- If the amount invested in CDs doubled, what would the new income be?
- How would the solution change if no extra money was invested in bonds?
Tip: When solving word problems involving investments, always double-check your interest calculations to ensure they match the problem's conditions.
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Math Problem Analysis
Mathematical Concepts
Algebra
Linear Equations
Investment Income Calculation
Formulas
Income from investment = Principal × Rate
Total investment = Amount in CDs + Amount in Bonds + Amount in Stocks
Income equation: 0.0425x + 0.024(x + 15000) + 0.087(135000 - (x + (x + 15000))) = 8112.5
Theorems
Properties of Linear Equations
Suitable Grade Level
Grades 9-12
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