Tuesday, January 29, 2008

fund amount

In a certain fund, 40 percent of the money is invested in stocks, and of that portion, 20 percent is invested in preferred stocks. If the fund has $576 invested in preferred stocks, what is the total amount of the fund?

A. $960
B. $1,440
C. $2,880
D. $4,608
E. $7,200

5 comments:

jfd said...

I think the total invested in stocks is $2,880 that being 40% of the money invest the total is E. $7,200 ?

Anonymous said...

40%x20% ----- 576
100% -------- X

= (100%x576)/(40%x20%) = 7.200 so you're right.

HC

Luís Botelho Ribeiro said...

Dear folks - it's really a pleasure to have your growing contribution to this discussion. You're both right about the result - I'll simply try to put it in other words.

Let S be total ammount of the investment fund, the quantity we're seeking after all. The text simply states that 40% of S is invested in stocks. So stocks-value is 0,4xS.

20% of these are prefered stocks, thus yielding 0,2 x (0,4xS) = $576.

The result comes from S = $576 / (0,2x0,4)

S = $576 / 0,08 = $7.200

:. let's take option E.

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Anonymous said...

Since $576 accounts for 20% of 40%, and also since 20% is 1/5th of 100%, then $576*5=$2880 is the 40% invested in stocks.

Likewise, 40% is 4/10th of 100%, then $2880*10/4=$7200 is the total amount of the fund.