Chapter 7.6, Problem 15P

To determine

The interest receive from the bonds .

Answer to Problem 15P

  $\$1440$ .

Explanation of Solution

Given information:

Jesse invested $\$2000$ more in stocks than in bonds. The bonds paid $7.2\%$ interest and stocks paid $6\%$ . The income from each investment was the same.

Calculation:

From the given information, firstly write the expression for the income from bonds where $x$ is the amount invested in bonds:

Income from bonds: $0.072x$

Write the expression for the income from stocks using the given information that $2000$ more invested in stocks than bonds:

Income from stocks: $0.06(x+2000)$

The income are the same for the stocks and bonds:

  $0.072x=0.06(x+2000)$

By distributing property:

  $0.072x=0.06x+120$

Subtract $0.06x$ on both sides:

  $0.012x=120$

Divide both sides by $0.012$ :

  $x=10,000$

Now find the income from bonds:

  $0.072(10,000)=720$

Find the total income by multiplying by $2$ since stocks and bonds each had the same income.

  $2(720)=1440$

Thus, the solution is $\$1440$ .