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smandalika
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X buys $7000 of french bonds and 12000 of mexican bonds . 08 Aug 2004, 20:46
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X buys $7000 of french bonds and 12000 of mexican bonds . the mexican bonds pay a simple annual interest of 2% more than the french bonds. If the total annual return is 1380 , find the interest rate offered on each bond ?



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Paul
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X buys $7000 of french bonds and 12000 of mexican bonds . 08 Aug 2004, 21:02
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French: 6% Mexican: 8% --> 1min
Let X be the interest rate on french bond
7000X + 12000(X+.02) = 1380
19000X = 1140
X = .06
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hardworker_indian
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X buys $7000 of french bonds and 12000 of mexican bonds . 08 Aug 2004, 23:34
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Yes, 6% and 8%. Same method as Paul.
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smandalika
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X buys $7000 of french bonds and 12000 of mexican bonds . 09 Aug 2004, 17:07
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heres a different way of solving it.

if the mexican bonds hadnt yielded the extra 2%. then the total interest accrued would have been

1380 - (.02)*12000 = 1140
since this total interest accrued on both the principals
total principal = 7000 + 12000

hence the lower rate of interest is 1140/19000 = 6%

so the final ans is 6% and 8%
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krish
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X buys $7000 of french bonds and 12000 of mexican bonds . 09 Aug 2004, 17:30
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6% and 8% for french and mexican respectively. By the way, apart frm the usual method mentioned above, is there any easier/faster way to do this problem ?

Thanks



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