Question

Pierre inherited S269,100 from his uncle and decided to invest the money. He put part of the

money in a money market account that earns 3.1% simple interest. The remaining money was

invested in a stock that returned 4% in the first year and a mutual fund that lost 2% in the first

year. He invested $10,000 more in the stock than in the mutual fund, and his net gain for 1 yr

was $3180. Determine the amount invested in each account.

Answer 1

Pierre invested:

• $9,000 in money market account
• $135,050 in stocks
• $125,050 in the mutual fund

Explanation:

A = money market account

B = stocks

C = mutual fund

A + B + C = 269,100

0.031A + 0.04B - 0.02C = 3,180

B = 10,000 + C (we will first replace B)

A + 10,000 + C + C = 269,100

A + 2C = 259,100

0.031A + 0.04(10,000 + C) - 0.02C = 3,180

0.031A + 400 + 0.04C - 0.02C = 3,180

0.031A + 0.02C = 2,780

A + 2C = 259,100

-100(0.031A + 0.02C) = -100 · 2,780

A + 2C = 259,100

-3.1A - 2C = -278,000

-2.1A = -18,900

A = -18,900 / -2.1 = $9,000

C = (259,100 - 9,000) / 2 = $125,050

B = $125,050 + $10,000 = $135,050