Answer :

Let the invested money in PPF be x and in national bonds be y.

According to the question,

X + y

x , y

Maximize Z = 0.12x + 0.15y

The feasible region determined by X + y x ,

y is given by

The corner points of the feasible region are A(1000,11000) , B(1000,2000) and C(10000,2000) . The value of Z at the corner point are

The maximum value of Z is 1770 at point A(1000,11000).

So, he must invest Rs.1000 in PPF and Rs.11000 in national bonds.

The maximum annual income is Rs.1770 .

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