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

<p>Suppose someone wants to invest $110,000.</p>

<p>They have 4 choices as to what they invest their money into:</p>

<ul>
<li>municipal bond yielding 6%,</li>
<li>an industrial bond yielding 13%,</li>
<li>Treasury bills at 10%,</li>
<li>certificates of deposit (CDs) at 9%.</li>
</ul>

<p>I want to maximise their annual interest (in dollars)</p>

<p>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)?</p>

CC BY-SA 3.0
2016-04-06T17:30:31.093Z
@Lumi, please consider writing up your comment as an answer.
BKay
CC BY-SA 3.0
2015-04-26T13:32:57.353Z
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 ?
Namch96
CC BY-SA 3.0
2015-04-26T17:02:54.143Z
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
<investment><optimization><linear-programming>
Optimisation of bonds
Namch96
# Optimisation of bonds

(Asked by: username_0 on 2015-04-26)

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)?

**Tags:** investment, optimization, linear-programming

> **Comments:**
> **username_0**: 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 ?  
> **username_2**: 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.  
> **username_1**: @username_2, please consider writing up your comment as an answer.  

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## 0 answers

