Below problem is one that I'm drawing a blank on for even setting up the equation. Any help would be greatly appreciated.
Smith recently inherited a large sum of money; he wants to use a portion of this money to set up a trust fund for his two children. The trust fund has two investment options: (1) a bond fund and (2) a stock fund. The projected returns over the life of the investments are 6% for the bond fund and 10% for the stock fund. Whatever portion of the inheritance he finally decides to commit to the trust fund, he wants to invest at least 30% of that amount in the bond fund. In addition, he wants to select a mix that will enable him to obtain a total return of at least 7.5%.
What is the value of the optimal solution, i.e., the value of the objective function once you have determined the values of decision variables?
The following outlines the process of determining the objective function and constraint then demonstrates the process of finding the constrained optimum.