document.write( "Question 1201322: Ashley has earmarked at most $950,000 for investment in three mutual funds: a money market fund, an international equity fund, and a growth-and-income fund. The money market fund has a rate of return of 6%/year, the international equity fund has a rate of return of 10%/year, and the growth-and-income fund has a rate of return of 15%/year. Ashley has stipulated that no more than 25% of her total portfolio should be in the growth-and-income fund and that no more than 50% of her total portfolio should be in the international equity fund. To maximize the return on her investment, how much should Ashley invest in each type of fund?
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Algebra.Com's Answer #835632 by ikleyn(52777) $\"\"$ $\"About$

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\n" ); document.write( "Ashley has earmarked at most $950,000 for investment in three mutual funds:
\n" ); document.write( "a money market fund, an international equity fund, and a growth-and-income fund.
\n" ); document.write( "The money market fund has a rate of return of 6 %/year,
\n" ); document.write( "the international equity fund has a rate of return of 10%/year,
\n" ); document.write( "and the growth-and-income fund has a rate of return of 15%/year.
\n" ); document.write( "Ashley has stipulated that no more than 25% of her total portfolio should be in the growth-and-income fund
\n" ); document.write( "and that no more than 50% of her total portfolio should be in the international equity fund.
\n" ); document.write( "To maximize the return on her investment, how much should Ashley invest in each type of fund?
\n" ); document.write( "money market fund $
\n" ); document.write( "international equity fund $
\n" ); document.write( "growth-and-income fund $ \r
\n" ); document.write( "\n" ); document.write( "What is the maximum return?\r
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document.write( "It is OBVIOUS, that under the given conditions, the most agressive strategy should be applied:\r\n" );
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document.write( "   - the maximum possible amount should be invested in the growth-and-income fund \r\n" );
document.write( "     at a rate of return of 15%/year;\r\n" );
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document.write( "   - the maximum possible amount should be invested in the international equity fund at 10%/year;\r\n" );
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document.write( "   - the rest should be invested in the money market fund at 6%/year.\r\n" );
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document.write( "So, 25% of $950,000 goes at 15% interest per year, or 0.25*950000 = 237500 dollars;\r\n" );
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document.write( "    50% of $950,000 goes at 10% interest per year, or 0.50*950000 = 475000 dollars;\r\n" );
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document.write( "    25% of $950,000 goes at  6% interest per year, or 0.25*950000 = 237500 dollars.\r\n" );
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document.write( "The maximum return /(interest) is 0.15*237500 + 0.1*475000 + 0.06*237500 = 97375 dollars.\r\n" );
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\n" ); document.write( "\n" ); document.write( "This problem is entirely intended to check a presence of common sense.\r
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