Foundation scholarship and reduced tuition

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Reference no: EM131610728

An international graduate student will receive a $28,000 foundation scholarship and reduced tuition. She lust pay $1,500 in tuition each autumn, winter, and spring quarters, and $500 in the summer. Payments are due on the first day of September, December, March, and May, respectively. Living expenses are estimated to be $1,500 per month, payable on the first day of the month. The foundation will pay her $18,000 on August 1 and the remainder on May 1. To earn as much interest as possible, the student wishes to invest the money. Three types of investments are available at her bank: a 3-month CD, earning 0.75%; a 6-month CD earning 1.9%; and a 12-month CD earning 4.2%. Develop a linear optimization model to determine how she can best invest the money and meet her financial obligations.

The interest rate is for the current period, 3-month cd, 6-month cd, and 12-month cd.

Reference no: EM131610728

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