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Consider right angled triangle with the hypotenuse of 40 inches long.
Circumscribe the circle about this triangle.
Then the hypotenuse is the diameter of this circle.
It is absolutely clear/obvious then, that the maximum height will be provided by the perpendicular to the diameter,
erected from its middle point (which is the center of the circle)
It means that the triangle which provides the maximum area, is the ISOSCELES right angled triangle with the hypotenuse of the given length.
So, the answer is: the legs of this triangle must be inches
and its area is then = = 40*10 = 400 square inches.
Solved.