Example

Solving an Investment Fund Interest Application Using a System of Equations

To solve an interest application where a principal is divided between two investments, apply a system of equations by adapting the mixture table method. For example, if Adnan has $40,000\$40{,}000 to invest and hopes to earn 7.1%7.1\% interest per year, splitting it between a stock fund earning 8%8\% and bonds earning 3%3\%, let ss be the amount in stocks and bb be the amount in bonds. The total principal gives the first equation: s+b=40,000s + b = 40{,}000. The total interest gives the second equation: 0.08s+0.03b=0.071(40,000)0.08s + 0.03b = 0.071(40{,}000). Solving this system, such as by multiplying the top equation by 0.03-0.03 to eliminate bb, yields s=32,800s = 32{,}800 and b=7,200b = 7{,}200. Adnan should invest $32,800\$32{,}800 in stocks and $7,200\$7{,}200 in bonds.

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Updated 2026-04-25

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