Question

. Suppose you received an unexpected inheritance of $72,000. You have decided to invest the money by

placing some of the money in stocks and some in bonds. To diversify, you decided that five times the
amount in bonds should equal three times the amount invested in stocks. How much should be invested in
stocks?

Answer 1

$45000 should be invested in stocks

Explanation:

Given

Represent Bonds with B and stocks with S

`S + B = 72000`

`5B = 3S`

Required

Determine the values of S

Solve for B in
`5B = 3S`

`B = (3)/(5)S`

Substitute
`(3)/(5)S` for B in
`S + B = 72000`

`S + (3)/(5)S = 72000`

`(5+3)/(5)S = 72000`

`(8)/(5)S = 72000`

Solve for S

`S = 72000 * (5)/(8)`

`S = (72000 * 5)/(8)`

`S = (360000)/(8)`

`S = 45000`

Hence: $45000 should be invested in stocks