Question

Zach is planning to invest up to $50,000 in corporate and municipal bonds. The lest he will invest in corporate bonds is $6000 and he does not want to invest more than $27,000 in corporate bonds. He also does not want to invest more than $34,650 in municipal bonds. The interest is 8.5% on corporate bonds and 6.8% on municipal bonds. This is simple interest for one year. What is the maximum income?

Answer 1

He is investing both amounts for the same amount of time, and both at simple interest rates. The only differentiating factor here is the interest rate, so it would make sense for him to invest as much as possible in corporate bonds, because they earn the higher rate of interest. This should be enough to work out your answer.