Answered

IDNLearn.com provides a platform for sharing and gaining valuable knowledge. Discover prompt and accurate answers from our experts, ensuring you get the information you need quickly.

You have $90,000 for investment. You will invest S dollars in stocks and B dollars in bonds. You expect a 10% return on stocks and a 2% return on bonds. You want a total return of 5% on your investment.(a)The dollar amount of the total return is0.05 ✕ 90,000 = $4500.What is the dollar amount of return for stocks, and what is the dollar amount for bonds? (Suggestion: Your answers will involve the variables S and B.)

Sagot :

The dollar amount for the return on stocks is $3375 and the dollar amount for the return on bonds is $1125.

Two equations can be derived from the question:

s + b = $90,000 equation 1

0.1s + 0.02b = $4500 equation two

$4500 = 0.05  x $90,000

The above equation is a simultaneous equation and it would be solved using the elimination method.

The following steps would be take to determine the value of b

Multiply equation 1 by 0.1

0.1s + 0.1b = 9000 equation 3

Subtract equation 2 from 3

0.08b = $4500

b = $56,250

The following step would be taken to determine the value of s

Substitute for b in equation 1

s + $56,250 = $90,000

$90,000 - $56,250 = s

s = $33,750

Dollar amount for the return on stocks = $33,750 x 0.1 = $3375

Dollar amount for the return on bonds = $56,250 x 0,02 = $1125

To learn more about simultaneous equations, please check: brainly.com/question/23589883?referrer=searchResults

Your participation means a lot to us. Keep sharing information and solutions. This community grows thanks to the amazing contributions from members like you. IDNLearn.com has the answers you need. Thank you for visiting, and we look forward to helping you again soon.