Question

Gilbert plans to invest $14 000 into two types of bonds. one bond yields 8% interest each year and the other bond yields 12% interest each year. he needs to earn $1400 each year to consider the investment successful. how much should he invest in each bond?

Answers

  1. invest in each bond = $7000

    What is Profit and Loss?

    An income statement, also known as a profit and loss account, is one of a company’s financial statements and displays the company’s receipts and outlays for a specific time period. It explains how revenues are converted into net income or net profit.
    According to the given data:
    Let n be the amount invested at 8%
    the amount invested at 12% would be : 14000-n
    so,
    8n+12(14000-n) = 1400
    8n + 168000 – 12n = 1400 * 100
    4n + 168000 = 140000
    n = 28000/4
       =  7000
    Therefore,
    At 12% amount invested
    = 14000 – 7000
    = $7000
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