Fund A earns 14.6%/year & Fund B earns 9.8%/year. How should an investment be divided to get 11% return?

Past history indicates that mutual fund A will earn 14.6% annually and mutual fund B will earn 9.8% annually. How should an investment be divided between the two funds to produce an expected return of 11%?

14.6 (wt a) + 9.8 (wt b)= 11

14.6 (.25) + 9.8 (.75) =11

3.65 + 7.35 = 11

To answer the question, A should be 25% and B should be 75%.

yeah, its 25 and 75.

14.6x +9.8y=11
and
x + y =1

you get rid of "y" by multiplying the whole second equation by -9.8.

this gives:

-9.8x -9.8y= -9.8
you then put add this to the first equation:

14.6x +9.8y=11
-9.8x -9.8y =-9.8
which turns out to be 4.8x = 1.2

x=1.2/4.8 which equals 0.25 (25%) so y then equals 75%

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