Question

You have already invested $300 in a stock with an annual return of 11%. How much of an additional $1,600 should be invested at 12% and how much at 6% so that the total return on the entire $1,900 is 9%?

Answer 1

Set up an equation with the amount invested distributed on one side and the return (9 percent of 1900) on the other. You need to write the amount your investing in the six percent and in the twelve percent in terms of one variable (say x and 1600-x) so that the equation looks something like this:\[(.11)(300)+.12(1600-x)+.06(x)=(.09)(1900)\]In this equation, when you will have solved for x, you will have found the amount in the six percent account, and the remainder from the 1600 dollars belongs in the 12 percent account. Do you follow?