accounting
Mr. and Mrs. Garcia have a total of $ 100,000 to be invested in stocks, bonds, and a money market account.The stocks have a rate of return of 12%/ year, while the bonds and the money market account pay 8% and 4%/ year, respec-tively. They have stipulated that the amount invested in the money market account should be equal to the sum of 20% of the amount invested in stocks and 10% of the amount invested in bonds. How should the Garcias allocate their resources if they require an annual income of $ 10,000 from their investments?
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The Garcias should invest $40,000 in stocks, $40,000 in bonds, and $20,000 in a money market account. This will generate an annual income of $10,000 ($4,800 from stocks, $3,200 from bonds, and $2,000 from the money market account). The 40,000 in stocks would represent 40% of the total investment, and the 40,000 in bonds would represent 40% of the total investment. The 10,000 in a money market account would represent 20% of the total investment and would be equal to 20% of the amount invested in stocks and 10% of the amount invested in bonds.
