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Rachel can invest up to$10,000 (USD) in the American stock market. She can invest in stocks and loans, and each dollar invested in stocks in the American market yields 10 percent profit, and each dollar invested in a loan yields 15 percent profit.  At most 40% of all money invested in each market can be in loans. How do you formulate this problem as an algebraic linear programming model?

Rachel can invest up to$10,000 (USD) in the American stock market. She can invest in stocks and loans, and each dollar invested in stocks in the American market yields 10 percent profit, and each dollar invested in a loan yields 15 percent profit.  At most 40% of all money invested in each market can be in loans. How do you formulate this problem as an algebraic linear programming model?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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Rachel can invest up to$10,000 (USD) in the American stock market. She can invest in stocks and loans, and each dollar invested in stocks in the American market yields 10 percent profit, and each dollar invested in a loan yields 15 percent profit.  At most 40% of all money invested in each market can be in loans.

How do you formulate this problem as an algebraic linear programming model?

Expert Solution
Decision Variables,

Let,

S is the number of Dollars invested in Stock and 

L is the number of Dollars invested in Loan 

 

 

 

 

 

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