I'm doing an optimisation problem but don't understand what the terms mean.

Suppose someone wants to invest $110,000.

They have 4 choices as to what they invest their money into:

  • municipal bond yielding 6%,
  • an industrial bond yielding 13%,
  • Treasury bills at 10%,
  • certificates of deposit (CDs) at 9%.

I want to maximise their annual interest (in dollars)

There are some constraints (which I haven't typed) but I just want to know what these terms mean. Say, they invest $27,500 on each one, what would their annual interest be (in dollars)?

  • 1
    $\begingroup$ I think that if he puts m on municipal bonds , i on industrial, t on treasury and c on CDs then the annual interest would just be 6% of m + 13% of i + 10% of t + 9% of c ? $\endgroup$
    – Namch96
    Apr 26 '15 at 13:32
  • 2
    $\begingroup$ That's right. Say they put \$100,000 on an industrial bond at 13%, then the annual interest will be \$13,000. The rest is linear-programming. $\endgroup$
    – Lumi
    Apr 26 '15 at 17:02
  • $\begingroup$ @Lumi, please consider writing up your comment as an answer. $\endgroup$
    – BKay
    Apr 6 '16 at 17:30

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