Investment problems - world problems i need help!?

Question

Mrs Chin, on reaching age 65, invested $18,000 of her insurance policy in AA bonds paying 8 1/2% and a common stock paying 7 1/2%. If her yearly income from these 2 investments is $1,470.00, how much did she invest in the bond and how much in the stock?

Anwrs: $12,000 , $6,000

Can some1 plz help me step by step solve this so i can understand


BIG THX!!

Answer 1

You should always start by defining variables:

Let B denote the amount in dollars that was invested in bonds
Let S denote the amount in dollars that was invested in the stock

You have two unknowns, so you need two equations.

Equation 1:
The total amount invested was $18,000, so

B + S = 18000

Equation 2:
The income from the bonds is 0.085 B
The income from the stock is 0.075 S

The total income is $1,470.00, so

0.085 B + 0.075 S = 1470

Solve the two equations for B and S. For example, you can solve the first equation for B in terms of S, then substitute that into the second equation to get an equation in S only.