Chapter 3.5, Problem 2E

Reminder Round all answers to two decimal places unless otherwise indicated.

More on investing You have $20, 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 total return of 5% on your investment.

a. The dollar amount of total return is $0.05\times 20,000=\$1000$. What is the dollar amount of return stocks and dollar amount for bonds? (Suggestion: Yours answers will in volve the variables $S$ and $B$.)

b. Write a system of two equations in two unknowns that determines how much will be invested in each category. (Suggestion: One equation should show the total amount invested. The equation should show the total dollar return.)

c. Solve the system from part b to find the amount invested in stocks and the amount invested in bonds.