# Things did not go quite as planned. You invested \$3,200.00, part of it in a stock that paid 8% annual interest.?

Things did not go quite as planned. You invested \$3,200.00, part of it in a stock that paid 8% annual interest. However, the rest of the money suffered a 4% loss. The total annual income from both investments was \$100.00. For the following, use x for the amount invested at 8% and y for the amount that lost money.

a) Write a mathematical expression for the total amount of money invested.

b) Write a mathematical expression for the total interest earned.

c) How much money was invested at a loss?

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• Anonymous
9 months ago

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• Whoever gave you this problem is doing a piss poor job of providing a clear question about the stock market. They are using all the wrong terminology.

Stocks don't pay "interest". Stocks increase (or decrease) in capital value and may (or may not) pay "dividends". So are they saying the stock increased in value by 8% (capital gains) or that it paid 8% YIELD in dividends?

The only way that an investment can take a 4% loss is to lose 4% of its capital value (negative capital gain), because you can't have negative dividends or interest. A stock can still pay dividends, even if they suffer a capital loss.

There term "income" is used to refer to dividends, not capital gain.

TOTAL RETURN is the term that includes interest, capital gains, dividends and distributions realized over a given period of time.

That said, even though it doesn't make a lot of sense for a stock market problem I think the answers they are asking for are:

a) x+y=3200

b) 0.08x-0.04y=100

c) Solve for y:

x=3200-y

0.08(3200-y)-0.04y=100 :: 256 - 0.08y - 0.04y = 100 :: 256-100 = 0.12y :: 156/.12 = y

y = 1300; x=1900

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• This is barely junior high algebra homework.

LEARN what you are supposed to be learning in class.

Note: This is a poorly written question because stocks DO NOT PAY INTEREST.

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• it means she doesn’t have manors

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