Chapter 9.3, Problem 15P

To determine

To find: The amount invested in the bounds.

Answer to Problem 15P

The amount invested in stocks is $\$6500$ and the amount invested in bounds is $\$2,500$ .

Explanation of Solution

Given:

Theamount invested in the stocks and the bounds is $\$9000$ .

The stock paid is $5\%$ and the bonds is $8\%$ .

The annual income is $\$525$ .

Calculation:

Consider the amount invested in the stock is $x$ and the amount invested in the bonds is $y$ .

Then, the total amount invested is,

  $\begin{array}{l}x+y=9000\\ y=9000-x\end{array}$

As the amount interest earned is equal interest rate times to the amount invested then,

  $0.05x+0.08y=525$

Then,

  $\begin{array}{l}0.05x+0.08\left(9000-x\right)=525\\ 0.05x+720-0.08x=525\\ -0.03x=-195\\ x=\$6500\end{array}$

Then, the amount invested in bounds is,

  $\begin{array}{c}y=\$9000-\$6500\\ =\$2,500\end{array}$