Concept explainers
To calculate amount invested in stock.
Answer to Problem 5.4.2.5P
Minimum amount invested in stock is $20,000
Maximum amount invested in stock is $30,000
Explanation of Solution
Given information:
R invested $50,000 in two options
Option 1 is the money market account that pays 4% simple interest
Option 2 is the stock that pays 24% simple interest
Total amount of both investment after one year at least $56000 and not more than $58000.
Formula used:
Where
P is principle r is rate of interest t is time A is amount
Calculation:
Let x be the amount invested in stock
Then, the amount invested in money market account 50000- x
Option 1
P=50000-x
r=4%
t=1
Using formula to calculate the amount in option 1 after one year
On solving,
Option 2
P=x
r=24%
t=1
Using formula to calculate the amount in option 2 after one year
On solving,
Total amount of both investment after one year at least $56000 and not more than $58000.
Then,
On solving,
On solving,
On solving,
Substracting 52000 all sides of compount inequality
On solving,
Multiply both sides by 5
Minimum amount invested in stock is $20,000
Maximum amount invested in stock is $30,000
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Algebra 1, Homework Practice Workbook (MERRILL ALGEBRA 1)
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