A pension fund manager decides to invest a total of at most $30 million in U.S. Treasury bonds paying 4% annual interest and in mutual funds paying 8% annual interest. The fund manager plans to invest at least $5 million in bonds and at least $10 million in mutual funds. Bonds have an initial fee of $100 per million dollars, while the fee for mutual funds is $200 per million. The fund manager is allowed to spend no more than $5000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest?
A pension fund manager decides to invest a total of at most $30 million in U.S. Treasury bonds paying 4% annual interest and in mutual funds paying 8% annual interest. The fund manager plans to invest at least $5 million in bonds and at least $10 million in mutual funds. Bonds have an initial fee of $100 per million dollars, while the fee for mutual funds is $200 per million. The fund manager is allowed to spend no more than $5000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest?
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
Section: Chapter Questions
Problem 11P: The employee credit union at State University is planning the allocation of funds for the coming...
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A pension fund manager decides to invest a total of
at most $30 million in U.S. Treasury bonds paying 4% annual
interest and in mutual funds paying 8% annual interest. The
fund manager plans to invest at least $5 million in bonds and at
least $10 million in mutual funds. Bonds have an initial fee of
$100 per million dollars, while the fee for mutual funds is
$200 per million. The fund manager is allowed to spend no
more than $5000 on fees. How much should be invested in
each to maximize annual interest? What is the maximum
annual interest?
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