#### absolutjosh

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- Thread starter absolutjosh
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What does your textbook say - What your thoughts - Where exactly are you stuck?absolutjosh said:

For starter - if the investor does not to invest

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You are told how much the bond fund yields, so find the interest on that investment.

You now have the value you need to match. (I will assume that the stock fund is taxed only on the income, not on the initial $1000.) At the end of the year, you will have your initial investment amount, plus whatever return is left after the 35% total taxes. That is, you'll have your $1000, plus 65% of your return:

. . . . .$1000 + (65%)[(some rate of return)($1000)]

Simplifying, we get:

. . . . .$1000[1 + (65%)(some rate of return)]

Convert the percentage to a decimal, pick a variable to stand for the unknown, set the expression equal to the desired value (found above), and solve for the variable.

Hope that helps!

Eliz.

P.S. Welcome to FreeMathHelp!