Posted by **Nukdog** on Tuesday, June 23, 2009 at 8:59pm.

Deborah inherited a large sum of money; she wants to use a portion of this money to set up a trust fund for her two children. The trust fund has two investment options: 1) a bond fund and 2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance she finally decides to commit to the trust fund, she wants to invest at least 30% of the amount in the bond fund. In addition, she wants to select a mix that will enable her to obtain a total return of at least 7.5%.

- Math -
**MathMate**, Wednesday, June 24, 2009 at 1:31am
Let

b=fraction of investments for bonds,

1-b=fraction of investments for stocks.

we require b>0.3:

Thus

b*0.06+(1-b)*0.1=0.075

Solve the equation for the maximum value of b. Also make sure that b>0.3,

(answer is 0.3≤ b ≤5/8)

## Answer this Question

## Related Questions

- Math - How do I formulate this question to be solved in the POM-QM software? ...
- Stats - G. Johnson recently inherited a large sum o money; he wants to use a ...
- Finance - Your client has been given a trust fund valued at $1 million. She ...
- Math - A deposit of $10,000 is made in a trust fund that pays 4.9% interest, ...
- business math - The parents of a child have just come into a lare inheritance ...
- Consumer Math - Which ones of these are true about a living trust. (there can be...
- Statistics - You have received a year-end bonus of $5000. You decide to invest ...
- Personal Finance - 3. Highest performing mutual fund (averaged more than 20%) ...
- MSIS Management Science Methods - How can I set this question up in Lindo? ...
- algebra - On the day a child was born, a lump sum P was deposited in a trust ...