A financial advisor recommends a client to invest a total of at most $50 million in U.S. Treasury bonds paying 4% annual interest and in mutual funds paying 8% annual interest. He suggests to invest at least 10 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 financial advisor is allowed to spend no more than $5,000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest? Formulate the problem in mathematical form. Let: X: million of dollars to be invested in U.S. Treasury bonds Y: million of dollars to be invested in mutual funds What is the objective function? O max Z = 0.04 •X + 0.08 * Y max z = 100 * X+ 200 * Y O max Z = 50 * X + 50 * Y O min z = 150 *X+ 250 * Y
A financial advisor recommends a client to invest a total of at most $50 million in U.S. Treasury bonds paying 4% annual interest and in mutual funds paying 8% annual interest. He suggests to invest at least 10 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 financial advisor is allowed to spend no more than $5,000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest? Formulate the problem in mathematical form. Let: X: million of dollars to be invested in U.S. Treasury bonds Y: million of dollars to be invested in mutual funds What is the objective function? O max Z = 0.04 •X + 0.08 * Y max z = 100 * X+ 200 * Y O max Z = 50 * X + 50 * Y O min z = 150 *X+ 250 * Y
College Algebra (MindTap Course List)
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ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
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Transcribed Image Text:A financial advisor recommends a client to invest a total of at most $50
million in U.S. Treasury bonds paying 4% annual interest and in mutual funds
paying 8% annual interest. He suggests to invest at least 10 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
financial advisor is allowed to spend no more than $5,000 on fees. How much
should be invested in each to maximize annual interest? What is the
maximum annual interest?
Formulate the problem in mathematical form. Let:
X: million of dollars to be invested in U.S. Treasury bonds
Y: million of dollars to be invested in mutual funds
What is the objective function?
max Z = 0.04 * X + 0.08 * Y
max z = 100 * X+ 200 * Y
max Z = 50 * X + 50 * Y
O min z = 150 * X + 250 * Y
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