Question

John received an inheritance of $12,000 that he divided into three parts and invested in three ways: in a money-market fund paying 3% annual interest; in municipal bonds paying 4% annual interest; and in mutual funds paying 7% annual interest. John invested $4,000 more in municipal funds than in municipal bonds. He earned $670 in interest the first year. Write a system of 3 linear equations using the variables given.

Answer 1

inheritance $12000

money market 3% annual paying = x

municipal bonds 4% annual interest = y

mutual funds 7% annual interest = z

municipal funds = municipal bonds + $4000

Earns = $670 in interest

x + y + z = 12000 Equation 1

0.03x + 0.04y + 0.07z = 670 Equation 2

z = y + 4000 Equation 3