Teacher reccomended me!

[ryansmith069]

My teacher told me to come to this site for explanation and homework help. Thanks!

Past history indicates that mutual fund A will earn 17.0% annually while mutual fund B will earn 9.8% annually. If an investment amount is divided between funds A and B so that the expected return will be 11%, how should the investment be split between the two funds?

 

[stapel]

Congratulations on your teacher recommending you. For what did s/he recommend you?

Regarding your question:

. . .invested:
. . . . .at 17%: x
. . . . .at 9.8%: y
. . . . .overall: x + y

Since we aren't given an investment amount, use percentages instead, so the "overall" amount invested is "100%", or "1".

. . .invested:
. . . . .at 17%: x
. . . . .at 9.8%: y
. . . . .overall: 1

. . .interest rate:
. . . . .at 17%: 0.17
. . . . .at 9.8%: ...?
. . . . .overall: ...?

. . .interest earned:
. . . . .at 17%: 0.17(x)
. . . . .at 9.8%: ...?
. . . . .overall: ...?

Complete the table, add the input interest payments, set equal to the overall interest payment, and solve for the percentage split.

If you get stuck, please reply showing your work. Thank you.

Eliz.