Question
A retired person wants to invest up to an amount of Rs. 30,000 in the fixed income securities. His broker recommends investing in two bonds-
A retired person wants to invest up to an amount of Rs. 30,000 in the fixed income securities. His broker recommends investing in two bonds- bond A yielding 7% per annum and bond B yielding 10% per annum. After some consideration the person decides to invest at the most Rs. 12,000 in bond B and at least Rs. 6,000 in bond A. He also wants that the amount invested in bond A must be at least equal to the amount invested in bond B. What should the broker recommend if the investor wants to maximise his return on investment? Formulate this as a linear programming problem and solve graphically.
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