Bob and Dora Sweet wish to start investing $1,000 each month. The Sweets are looking at five investment plans and wish to maximize their expected return each month. Assume interest rates remain fixed and once their investment plan is selected they do not change their mind. The investment plans offered are: Fidelity 9.1% return per year Optima 16.1% return per year CaseWay 7.3% return per year
Bob and Dora Sweet wish to start investing $1,000 each month. The Sweets are looking at five investment plans and wish to maximize their expected return each month. Assume interest rates remain fixed and once their investment plan is selected they do not change their mind. The investment plans offered are:
| Fidelity | 9.1% return per year |
| Optima | 16.1% return per year |
| CaseWay | 7.3% return per year |
| Safeway | 5.6% return per year |
| National | 12.3% return per year |
Since Optima and National are riskier, the Sweets want a limit of 30% per month of their total investments placed in these two investments. Since Safeway and Fidelity are low risk, they want at least 40% of their investment total placed in these investments.
Formulate the LP model for this problem, using the standard LP format. Remember to define the objective function, the decision variables, and label the constraint functions. There is no need to solve the problem.
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