Question
Asked Dec 23, 2019
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Pierre inherited $120,000 from his uncle and decided to invest the money. He put part of the money in a money market account that earns 2.2% simple interest. The remaining money was invested in a stock that returned 6% in the first year and a mutual fund that lost 2% in the first year. He invested $10,000 more in the stock than in the mutual fund, and his net gain for 1 yr was $2820. Determine the amount invested in each account.

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Expert Answer

Step 1

Let he put $x in a money market account that earns 2.2% simple interest.

$y in a stock that returned 6% in the first year .

$z in a mutual fund that lost 2% in the first year.

So,  x+y+z=120000

Step 2

He invested $10,000 more in the stock than in the mutual fund

So, y=z+10000

Step 3

His net gain  for ...

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2.2% of x + 6% of y 2% of z=2820 0.022x+0.06y-0.02z=2820

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