# Optimisation of bonds

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)?

• 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 ? Apr 26 '15 at 13:32
• 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.
– Lumi
Apr 26 '15 at 17:02