Math

The management of a private investment club has a fund of $114,000 earmarked for investment in stocks. To arrive at an acceptable overall level of risk, the stocks that management is considering have been classified into three categories: high-risk, medium-risk, and low-risk. Management estimates that high-risk stocks will have a rate of return of 17% per year; medium-risk stocks, 11% per year; and low-risk stocks, 5% per year. The investment in low-risk stocks is to be twice the sum of the investments in stocks of the other two categories. If the investment goal is to have an average rate of return of 9% on the total investment, determine how much the club should invest in each type of stock. (Assume that all the money available for investment is invested. Round your answers to the nearest whole number.)

  1. 👍
  2. 👎
  3. 👁
  1. h+m+l = 114000
    l = 2(h+m)
    .17h + .11m + .05l = .09(114000)

    h = 38000
    m = 0
    l = 76000

    check:
    38000 @ 17% = 6460
    76000 @ 05% = 3800

    114000 @ 9% = 10260

    1. 👍
    2. 👎
  2. 76000@17%=6460

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. Algebra

    A financier plans to invest up to $500,000 in two projects. Project A yields a return of 11% on the investment of x dollars, whereas Project B yields a return of 16% on the investment of y dollars. Because the investment in

  2. math

    The value of an investment A (in dollars) after t years is given by the function A(t) = A0ekt . If it takes 10 years for an investment of $1,000 to triple, how many years will it take for the investment to be $9,000? Simplify your

  3. math

    Your firm has the option of making an investment in new software that wil cost $130,000 today and is estimated to provide the savings shown in the table over5 years. year savings estimate 1 $35,000 2 50,000 3 45,000 4 25,000 5

  4. Algebra

    an investment of 72,000 was made by a business club. the investment was split into three parts and lasted for one year. the first part of the investment earned 8% interest. the second 6% and the third 9%. total interest from the

  1. business

    Money is (for obvious reasons) extremely important in our society and has been for several years. Acquiring it, however, can be easier said than done, which is why using investment opportunities can be advantageous. However, like

  2. Algebra

    An investment of $53,000 was made by a business club. The investment was split into three parts and lasted for one year. The first part of the investment earned 8% interest, the second 6%, and the third 9%. Total interest from the

  3. Math

    Suppose an investment of $2,300 doubles in value every decade. The function F(X)= 2300 * 2^X gives the value of the investment after x decades. How much is the investment worth after 2 decades? A.)$2,355,200 B.)$92,000 C.)$46,000

  4. Precalc

    An investment of $37,000 was made by a business club. The investment was split into three parts and lasted for one year. The first part of the investment earned 8% interest, the second 6%, and the the third 9%. Total interest from

  1. Algebra

    An investment of ​$54,000 was made by a business club.The investment was split into three parts and lasted for one year.The first part of the investment earned​ 8% interest, the second​ 6%, and the third​ 9%. Total

  2. word problem

    An investment of $93,000 was made by a business club. the investment was split into three parts and lasted for one year. The first part of the investment earned 8% interest, the second earned 6% and the third 9%. total interest

  3. personal finance

    Which of the following statements is FALSE: A) Individual investors should be involved in choosing a mutual fund because they know how the objective of a mutual fund match their own investement objectives B)Professional fund

  4. Algebra

    Michael invested his savings in two investment funds. The amount he invested in Fund A was $2,000 less than the amount he invested in Fund B. Fund A returned a 4% profit and Fund B returned a 3% profit. How much did he invest in

You can view more similar questions or ask a new question.