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
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5 comments:
I think the total invested in stocks is $2,880 that being 40% of the money invest the total is E. $7,200 ?
40%x20% ----- 576
100% -------- X
= (100%x576)/(40%x20%) = 7.200 so you're right.
HC
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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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.
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