Question

Luke received an inheritance of $15000 that he divided into three parts and invested in three ways: in a money-market (x) fund paying 4% annual interest;in municipal bonds (y) paying 3.5% annual interest; and in mutual funds (z) paying 8% annual interest. Luke invested twice in mutual funds than in money-market fund. He earned $845 in interest the first year. How much did Luke invest in each type of fund?

Answer 1

Kindly check explanation

Explanation:

Total principal invested = $15000

Investment x at 4% (0.04)

Investment y at 3.5% = 0.035

Investment z at 8% = 0.08

z investment = 2x

Total interest earned = $845

Simple interest = principal * rate * time

y * 0.035 + x * 0.04 + 2x * 0.08 = 845

0.035y + 0.2x = 845 - - - (1)

y + x + 2x = 15000

3x + y = 15000 - - - - (2)

y = 15000 - 3x

0.035(15000 - 3x) + 0.2x = 845

525 - 0.105x + 0.2x = 845

525 + 0.095x = 845

0.095x = 845 - 525

0.095x = 320

x = 320/0.095

x = 3368.42

Z = 2x

Z = 2 * 3368.42 = $6736.84

y = 15000 - 3(3368.42)

y = $4894.74