Question

In: Statistics and Probability

Zach is planning to invest up to $45000 in corporate and municipal bonds. the least he...

Zach is planning to invest up to $45000 in corporate and municipal bonds. the least he will invest in corporate bond is $8000 and he does not want to invest more than $28000 in corporate bonds. he also doe now want to invest more than $28311 in municipal bonds. the interest is 8.2% on corporate bonds and 5.9% on municipal bonds. this is simple interest for one year. what is the maximum value of his investment after one year ? show your work

A) $48,299 B) $31,299 C) $12,293 D) $20,299

Solutions

Expert Solution

Solution:

The correct option is A

Explanation:

corporate bond must be invested i.e. $28000

out of $45000 should be invested in municipal bonds i.e. $17000

Maximum value of investment after one year = [28000+(28000*8.2%)]+[17000+(17000*5.9%)] = $30296+$18003 = $48299

orchestra answered 2 years ago
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