The Fiedler family has up to $130,000 to invest. They decide that they want to have at least $40,000 invested in stable bonds yielding 5.5% and that no more than $60,000 should be invested in more volatile bonds yielding 11%. How much should they invest in each type of bond to maximize income if the amount in the stable bond should not exceed the amount in the more volatile bond? What is the maximum income?

1 answer

you can go through the calculations, but clearly the maximum income will happen if the full $60K is invested in the high-interest bonds, with an additional $60K in the low-yield instrument.