Algebra

posted by Veronika

A stock broker has $200,000 to invest in stocks and bonds. She wants to invest at least $100,000 in stocks and at least $50,000 in bonds. If stocks have an annual yield of 9% and bonds have an annual yield of 7% how much should she invest in each to maximize her income? Find the maximum return.

  1. Steve

    you want to

    maximize p = .09x + .07y subject to
    x+y <= 200000
    x >= 100000
    y >= 50000

    A little linear programming reveals
    x = 150000, y = 50000 p=17000

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