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Mr. Crabbs is planning to invest up to $45,000 in corporate and municipal bonds. The least he will invest in c?

  • Mr. Crabbs is planning to invest up to $45,000 in corporate and municipal bonds. The least he will invest in corporate bonds is $8000 and he does not want to invest more than $28,000 in corporate bonds. He also does not want to invest more than $29,944 in municipal bonds. The interest is 8.7% on corporate bonds and 6.1% on municipal bonds. (This is simple interest for one year.) What is the maximum income Mr. Crabbs can earn?

  • Answer:

    With more interest in corporate bonds, to get the maximum amount of income, he should invest $28000 in corporate bonds and $17000 in municipal bonds. He can earn (annually) 28000*8,7%+17000*6,1%=$3473. I hope it might help.

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