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Catracho Catracho
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Posts: 529
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5 years ago Edited: 5 years ago, bio_man
A person plans to invest a total of $100,000 in a money market account, a bond fund, an international stock fund, and a domestic stock fund. She wants 60% of her investment to be conservative (money market and bonds). She wants the amount in domestic stocks to be 4 times the amount in international stocks. Finally, she needs an annual return of $4,000. Assuming she gets annual returns of 25% on the money market account, 3.5% on the bond fund, 4% on the international stock fund, and 6% on the domestic stock fund, how much should she put In each investment?
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Valued Member
Educator
5 years ago
Set up your equation as

x + y + z + w = 100 000

0.025x + 0.035y + 0.04z + 0.06w = 4000

z = 4w   or   z - 4w = 0

x + y = 60 000

So we have 4 equations

w = 8000,
x = -14 000
y = 74000.0
z = 32000

If you want to see how it's solved, here's a similar example!

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