3. A man wished to invest $12,000 in three types of bonds: municipal bonds paying 7%...

 

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3. A man wished to invest $12,000 in three types of bonds: municipal bonds paying 7% interest per year, bank certificates paying 8%, and high-risk bonds paying 12%. For tax reasons he wants the amount invested in municipal bonds to be at least three times the amount invested in bank certificates. To keep his risk manageable, he will invest no more than $2000 in high-risk bonds. How much should he invest in each type of bond to maximize his annual interest yield? [Hint: Let x = amount in municipal bonds and y = amount in bank certificates. Then the amount in high-risk bonds will be 12,000-x-y.] 3. A man wished to invest $12,000 in three types of bonds: municipal bonds paying 7% interest per year, bank certificates paying 8%, and high-risk bonds paying 12%. For tax reasons he wants the amount invested in municipal bonds to be at least three times the amount invested in bank certificates. To keep his risk manageable, he will invest no more than $2000 in high-risk bonds. How much should he invest in each type of bond to maximize his annual interest yield? [Hint: Let x = amount in municipal bonds and y = amount in bank certificates. Then the amount in high-risk bonds will be 12,000-x-y.]

Answer rating: 100% (QA)

To solve this problem lets follow the given hints and use the variables x amount invested in municipal bonds y amount invested in bank certificates Th... View the full answer