Answer:
Mark should invest:
- $30,000 in short term bonds
- $30,000 in intermediate term bonds
- $40,000 in long term bonds
Explanation:
S = short term bonds
I = intermediate term bonds
L = long term bonds
S + I + L = 100,000
0.04S + 0.06I + 0.07L = 0.058 x 100,000 = 5,800
S = I
2S + L = 100,000
L = 100,000 - 2S (now we replace both I and L)
0.04S + 0.06s + 0.07(100,000 - 2S) = 5,800
0.1S + 7,000 - 0.14S = 5,800
7,000 - 5,800 = 0.14S - 0.1S
1,200 = 0.04S
S = 1,200 / 0.04 = 30,000
I = 30,000
L = 100,000 - 60,000 = 40,000
