Fred has $100,000 to invest in three different mutual funds. He wishes to invest

Question

Fred has $100,000 to invest in three different mutual funds. He wishes to invest this money and make an 8% profit over the next year. Over the last year, the first fund has had a return of 5%, the second fund has had a return of 7%, while the third fund has had a return of 14%. Fred likes the second fund, so he wishes to invest $30,000 more in the second fund than in the third fund. How much should he invest in each fund to make the 8% return on the $100,000? (Round your answers to the nearest cent.)

$ invested at 5%?

$ invested at 7%?

$ invested at 14%?

Explanation / Answer

let amount invested in 14% = $ x

amount invested in 7% = 30000 + x

amount invested in 5% = 100000 - ( x + 30000 + x )

= 70,000 - 2x

setting up the equation

.14x + .07 ( 30000 + x ) + .05 ( 70,000 - 2x ) = 8000

x = 21818.2

amount invested at 14% = $ 21818.2

amount invested at 7% = $ 51818.2

amount invested at 5% = $ 26363.6

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