A stock broker has $200,000 to invest in stocks and bonds. She wants to invest at least $100,000 in stocks and at least $50,000 in bonds. If stocks have an annual yield of 9% and bonds have an annual yield of 7% how much should she invest in each to maximize her income? Find the maximum return.

Answer 1

you want to

maximize p = .09x + .07y subject to
x+y <= 200000
x >= 100000
y >= 50000

A little linear programming reveals
x = 150000, y = 50000 p=17000