A pension fund manager decides to invest a total of at most $40 million in US Treasury bonds paying 4% annual interest and in mutual funds paying 7% annual interest. He plans to invest at least $5 million in bonds and at least $15 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 $7000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest? The amount that should be invested in Treasury bonds is $ million and the amount that should be invested in mutual funds is $ million
A pension fund manager decides to invest a total of at most $40 million in US Treasury bonds paying 4% annual interest and in mutual funds paying 7% annual interest. He plans to invest at least $5 million in bonds and at least $15 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 $7000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest? The amount that should be invested in Treasury bonds is $ million and the amount that should be invested in mutual funds is $ million
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A pension fund manager decides to invest a total of at most $40 million in US Treasury bonds paying 4% annual
interest and in mutual funds paying 7% annual interest. He plans to invest at least $5 million in bonds and at least
$15 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 $7000 on fees. How much should be invested in each
to maximize annual interest? What is the maximum annual interest?
CELOS
The amount that should be invested in Treasury bonds is $ million and the amount that should be invested in
mutual funds is $ million
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