Reference no: EM132242845

Assignment: Assume you have $50,000 to invest over the next five years. At the beginning of each year you can invest the available money in one, two or three-year time deposits. The bank pays 1.1% interest on one-year deposits, 2.1% interest (total) on two-year time deposits, and 3.2% interest (total) on three-year deposits. For instance, if you invest $1000 at the beginning of year 1 in one-year deposits, your return at the end of year 1, or beginning of year 2, would be 1.01*1000=$1010. This amount ($1010) will be invested at the beginning of year

2. If you invest the money that is available at the beginning of every year, formulate a linear programming to maximize your total cash on hand at the end of the fifthyear.

A: Assume that you can invest at the beginning of each year any value in the available investment options. Define decision variables, objective function, and constraints for your linear programming model.

B: Solve your investment LP model using Excel-Solver and obtain the optimal solution.