You made some unfortunate investment decisions. You invested a total of $6,000 in three funds: CHPX( Year-to-date loss: 4%), DYRX (Year-to-date loss: 3%), and EFFX (Year-to-date loss: 6%). Your investment included equal amount in CHPX and DYRX, and your year-to-date losses total $260.
How much did you invest in each of the three funds?
When we invest in more than 1 investments then in order to arrive at the average rate we need to have weighted averages for the investments,
Answer and Explanation:
Since the amount invested in CHPX and DYRX is equal earning a loss of 4% and 3% respectively we can say that we had a loss of -3.5% on the combined investment of both the stocks.
A total loss of $260 on a $6,000 is around 4.33%
So the combination of above 2 investment and EFFX (Year-to-date loss: 6%) will together fetch a loss of 4.33%
Let the investment which fetched a loss of 3.5% be X and investment which fetched a loss of 6% be Y
So 0.035X + 0.06Y = 260 ---- equation 1
X + Y = 6000
X = 6,000 - Y
using this in equation 1
0.035 (6,000 - Y) + 0.06Y = 260
Y = 2000, X = 4000
so the amount invested in all three funds is 2,000
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Learn more about this topic:
from ELM: CSU Math Study GuideChapter 11 / Lesson 9