Lux Investing
A renowned mathematician recieved a 60,000 bonus to accept a tenured professorship?
at a university. She invested part of the bonus in fixed income securities yielding 6% annually. The rest of the bonus money was invested in a high tech startup expecting to yiels 30% annually to its investors. How much was invested in tech business if she expected to earn 12240 annually from investments?
Public Comments
- Let's do a calculation to see how to solve the question. Suppose that 45,000 dollars was invested in the fixed income securities and the remaining 15,000 dollars was invested in the high tech startup. How much interest was earned from the securities? Answer: 45,000 times 6% = 450 times 6 = 2700 dollars. How much interest was expected to be earned from the tech business? Answer: 15,000 times 30% = 150 times 30 = 4500 dollars. Here, the professor would expect to earn 2700 + 4500 = 7200 dollars. As 7200 is lower than 12240, the correct answer would require more invested in the tech business and less invested in the securities. Look at the question ("How much ..."), let x denote that amount and come out with an equation that must be true for expecting to earn 12240 dollars. Solve the equation.
