A woman wishes to invest $14,000 in three types of bonds: municipal bonds paying 8% interest per year, bank investment certificates paying 9%, and high-risk bonds paying 13%. For tax reasons she wants the amount invested in municipal bonds to be at least three times the amount invested in bank certificates. To keep her level of risk manageable, she will invest no more than $4000 in high-risk bonds. How much should she invest in each type of bond to maximize her 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 $14,000 − x − y.] municipal bonds $______ bank certificates $______ high-risk bonds $______
A woman wishes to invest $14,000 in three types of bonds: municipal bonds paying 8% interest per year, bank investment certificates paying 9%, and high-risk bonds paying 13%. For tax reasons she wants the amount invested in municipal bonds to be at least three times the amount invested in bank certificates. To keep her level of risk manageable, she will invest no more than $4000 in high-risk bonds. How much should she invest in each type of bond to maximize her 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 $14,000 − x − y.] municipal bonds $______ bank certificates $______ high-risk bonds $______
Chapter15: Choice Of Business Entity—other Considerations
Section: Chapter Questions
Problem 76P
Related questions
Question
A woman wishes to invest $14,000 in three types of bonds: municipal bonds paying 8% interest per year, bank investment certificates paying 9%, and high-risk bonds paying 13%. For tax reasons she wants the amount invested in municipal bonds to be at least three times the amount invested in bank certificates. To keep her level of risk manageable, she will invest no more than $4000 in high-risk bonds. How much should she invest in each type of bond to maximize her 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 $14,000 − x − y.]
municipal bonds $______
bank certificates $______
high-risk bonds $______
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you