Question

Bella invested $1000 this past year and earned $110 in interest. Bella's investment portfolio was made up of two items: stocks, which earned 15% interest, and bonds, which earned 7% interest. How much money, in dollars, did Bella invest in stocks this year? Enter your answer as a number with two decimal places.

Answer 1

Answer: Bella invested $500 in first and $500 in second stock this year.

Explanation:

Given: Total principal amount = $1000

Interest = $110

For first year , interest = P x r , where P= principal , r= rate of interest ( in decimal)

For first bond , interest rate= 15% = 0.15

Let P = x

Interest = 0.15x

For second bond , interest rate= 7% = 0.07

Let P = 1000-x

Interest = 0.07(1000-x)=70-0.07x

Now,
`0.15x+70-0.07x=110`

`\Rightarrow\ 0.8x=40\\\\\Rightarrow x=(40)/(0.08)\\\\\Rightarrow x=500`

Also, 1000-x = 1000-500=500

Hence, Bella invested $500 in first and $500 in second stock this year.