Question
They also are looking to add to their savings by investing in two different types of bonds, a conservative bond that yields 5% per year
They also are looking to add to their savings by investing in two different types of bonds, a conservative bond that yields 5% per year and an aggressive bond that yields 10% per year. They have set aside a total of $60,000 to work with. It is decided that they should invest no more than 25% of their money in the aggressive market and no less than 50% in the conservative bonds and that their total investment should be at least $30,000.
a) How much should be invested in each type of bond to maximize their return?
b) If they must pay a 1% fee on the total conservative bond investment and 0.8% fee on the aggressive bonds, what combination of investments would minimize their fees yet still fall within the constraints listed in paragraph 2 of this problem?
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