Application of Integrals

Question

A retired person wants to invest an amount of Rs. 50, 000. His broker recommends investing in two type of bonds ‘A’ and ‘B’ yielding 10% and 9% return respectively on the invested amount. He decides to invest at least Rs. 20,000 in bond ‘A’ and at least Rs. 10,000 in bond ‘B’. He also wants to invest at least as much in bond ‘A’ as in bond ‘B’. Solve this linear programming problem graphically to maximise his returns.

Answer

Maximize Z  =  0.1x + 0.09 y
x + y ≤ 50000
x  ≥ 20000
y  ≥ 10000
y ≤ x

 

z=0.1 x+0.09y

P1 (20000,10000)

2900

P2(40000,10000)

4900

P3(25000,25000)

4750

P4(20000,20000)

3800

 
when A invest 400000 & B invest 10000 his return is maximum.

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