Math Problem Statement
A pension fund manager decides to invest a total of at most $40 million in U.S. Treasury bonds paying 6% annual interest and in mutual funds paying 9% annual interest. He plans to invest at least $5 million in bonds and at least $15 million in mutual funds. Bonds have an initial fee of $100 per million dollars, while the fee for mutual funds is $200 per million. The fund manager is allowed to spend no more than $7000 on fees. How much should be invested in each to maximize annual interest? What is the maximum annual interest? \
Solution
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Math Problem Analysis
Mathematical Concepts
Linear Programming
Optimization
Formulas
Objective Function: Maximize Interest = 0.06x + 0.09y
Fee Constraint: 100x + 200y ≤ 7000
Investment Constraints: x + y ≤ 40, x ≥ 5, y ≥ 15
Theorems
Linear Programming (Optimization) Theorem
Suitable Grade Level
College-Level (Mathematics or Economics)
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