a person plans to invest a total of $230,000 in a money market account, a bond fund an international stock fund and a domestic stock fund. She wants 60% of her investment to be conservative money market and bonds. She want the amount in domestic stocks to be 4 times the amount in international stocks Finally. she needs an annual return f $9,200. Assuming she gets an annual return of 2.5 % on the money market account and 3.5% on the bond fund,6% on the domestic stock fund, how much should she put in each investment?

Question

a person plans to invest a total of $230,000 in a money market account, a bond fund an international stock fund and a domestic stock fund.  She wants 60% of her investment to be conservative money market and bonds.  She want the amount in domestic stocks to be 4 times the amount in international stocks Finally. she needs an annual return f $9,200.  Assuming she gets an annual return of 2.5 % on the money market account and 3.5% on the bond fund,6% on the domestic stock fund, how much should she put in each investment?

oobleck · Answer

let the amounts (in thousands) in the 4 funds be w,x,y,z respectively. Now the constraints are
w+x+y+z = 230
w+x = 0.6 & 230
z = 4y
0.025w + 0.035x + 0.06y + ?z = 9.2
(you don't give the international % return)
so solve those 4 equations in the usual ways.