Setting Up Correct Equations...3

[mathdad]

Kelly has 20,000 to invest. As her financial planner, you recommend that she diversify into three
investments: treasury bills that yield 5 percent simple interest, treasury bonds that yield 7 percent simple interest, and corporate bonds that yield 10 percent simple interest. Kelly wishes to earn 1390 per year in income. Also, Kelly wants her investment in Treasury bills to be 3000 more than her investment in corporate bonds. How much money should Kelly place in each investment?

Set Up:

Let x = treasury bills

Let y = treasury bonds

Let z = corporate bonds

x + y + (x - 3,000) = 20,000
0.05x + 0.07y + 0.10(x - 3,000) = 1390

 

[Dr.Peterson]

You didn't actually use z, did you?

If you had included an equation x = z + 3000, you could have used z in the other equations instead of x - 3000. But what you have is fine.

 

[mathdad]

You didn't actually use z, did you?

If you had included an equation x = z + 3000, you could have used z in the other equations instead of x - 3000. But what you have is fine.

Good to know. We now move into the next section in chapter 11: Systems of Linear Equations Involving Matrices.