# How to Solve Investment Word Problems Involving Interest Rates and Profits?

• MHB
• bergausstein
In summary, the trust fund initially invested $8,000 at 6% annual interest and needs to invest an additional$32,000 at 8.5% to obtain a return of 8% on the total amount invested. The businessman invested $12,000 in two ventures, one with a profit of 8% and the other with a loss of 4%. Using the given information, it can be determined that he invested$9,000 in the first venture and $3,000 in the second. bergausstein 1. A trust fund has invested \$8000 at 6% annual interest.
How much additional money should be invested at
8.5% to obtain a return of 8% on the total amount
invested?

my solution,

let
$n=$amount invested @ 8.5%

$0.06(8000)+0.085n=0.08(8000+n)$

$480+0.085n=640+0.08n$

$0.085n-0.08n=640-480$

$n=32,000$

\$32,000 is the addtional money should be invested at 8.5%. is this correct? 2. A businessman invested a total of \$12,000 in two ven-tures. In one he made a profit of 8% and in the other he
lost 4%. If his net profit for the year was $120, how much did he invest in each venture? in this problem i don't know how will i represent the amount invested in the other venture. please help. thanks! 1.) Correct. 2.) Let$x$represent the first investment amount and$y$represent the other. So we know: $$\displaystyle x+y=12000$$ And we also know: $$\displaystyle 0.08x-0.04y=120$$ which I would rewrite as: $$\displaystyle 2x-y=3000$$ Now, add the two equations to eliminate$y$, then solve for$x$, then use this value of$x$in either of the two equations to determine$y\$.

## 1. What is an investment word problem?

An investment word problem is a type of mathematical problem that involves using financial concepts, such as interest rates and time periods, to solve for different variables related to investments, such as the initial investment amount or the final value of an investment.

## 2. How do I approach solving an investment word problem?

To solve an investment word problem, you should first identify the variables given, such as the initial investment amount, interest rate, and time period. Then, use the appropriate equations and formulas to solve for the unknown variable. It is also helpful to create a timeline or table to organize the information and track the changes in the investment over time.

## 3. What are some common types of investment word problems?

Some common types of investment word problems include calculating compound interest, finding the total return on an investment, and determining the amount of time it will take for an investment to reach a certain value. Other variations may involve adding or subtracting additional investments or withdrawals from the original investment.

## 4. Are there any tips for solving investment word problems more efficiently?

One tip for solving investment word problems more efficiently is to convert all units to a consistent time period, such as years. This can make calculations easier and avoid errors. Additionally, it is important to carefully read and understand the problem before attempting to solve it, as well as double-checking your work to ensure accuracy.

## 5. How can investment word problems be applied in real life?

Investment word problems can be applied in many real-life scenarios, such as calculating interest earned on a savings account, determining the expected return on a stock investment, or planning for retirement. These types of problems help individuals make informed financial decisions and understand the potential outcomes of their investments.

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