Question

An investor invested a total of $2500 in two mutual funds. One fund earned a 5% profit while the other earned a 3% profit. If the investor’s total profit was $115, how much was invested in each mutual fund?

Answer 1

$500 and $2000

Explanation:

Let x represent the total investment = $2500

also, this total is split into two different funds

Lets represent these funds as a and b, such that fund a yields a profit of 3% and fund b yield a profit of 5%

So,

a + b = x

a + b = 2500 ......eq 1

Profit from each fund gives;

0.03 a + 0.05b = 115 ....eq 2

Solve simultaneously using substitution method

From eq 1;

b = 2500 - a

Slot in this value in eq 2

0.03a + 0.05 (2500 - a) = 115

expand

0.03a + 125 - 0.05a = 115

collect like terms

0.03a - 0.05a = 115 - 125

-0.02a = -10

Divide both sides by -0.02

a = $500

Put this value of a in eq 1

500 + b = 2500

Subtract 500 from both sides

b = 2500 - 500

b = $2000