Michael Has Decided to Invest $40,000 in Three Types of Funds

question 35

Essay

Michael has decided to invest $40,000 in three types of funds. Fund A has projected an annual return of 8 percent, Fund B has projected an annual return of 10 percent, and Fund C has projected an annual return of 9 percent. He has decided to invest no more than 30 percent of the total amount in Fund B and no more than 40 percent of the total amount in Fund C.
a. Formulate a linear programming model that can be used to determine the amount of investments Michael should allocate to each type of fund to maximize the total annual return.
b. How much should be allocated to each type of fund? What is the total annual return?

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Definitions:

Urinary Bladder

An organ that stores urine excreted by the kidneys before disposal via urination.

Urethra

The duct through which urine is discharged from the bladder to the exterior of the body in most mammals.

Ureter

A tube that carries urine from the kidneys to the bladder, facilitating the urinary excretion process.

Functional Units

Individual parts or components of a system that carry out specific functions, contributing to the system's overall operation.