Your uncle has $90,000 that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in three years. After consulting with his financial advisor, he has been offered two types of investments, labeled as investments A and B. • Investment A is available every year and its maturity period is 1 year. Each dollar invested in A at the beginning of a year returns $1.12 (a profit of $0.12) at the end of the year, in time for immediate reinvestment. • Investment B is only available in the beginning of year 2 and its maturity period is 2 years. Each dollar invested in B at the beginning of year 2 returns S1.30 two years later. Formulate this investment planning problem as a linear programming model for your uncle to maximize the amount of money that can be accumulated at the end of three years. You may implement this problem into excel directly.
Your uncle has $90,000 that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in three years. After consulting with his financial advisor, he has been offered two types of investments, labeled as investments A and B. • Investment A is available every year and its maturity period is 1 year. Each dollar invested in A at the beginning of a year returns $1.12 (a profit of $0.12) at the end of the year, in time for immediate reinvestment. • Investment B is only available in the beginning of year 2 and its maturity period is 2 years. Each dollar invested in B at the beginning of year 2 returns S1.30 two years later. Formulate this investment planning problem as a linear programming model for your uncle to maximize the amount of money that can be accumulated at the end of three years. You may implement this problem into excel directly.
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:Your uncle has $90,000 that he wishes to invest now in order to use the accumulation for
purchasing a retirement annuity in three years. After consulting with his financial advisor, he has
been offered two types of investments, labeled as investments A and B.
• Investment A is available every year and its maturity period is 1 year. Each dollar invested in A at
the beginning of a year returns $1.12 (a profit of $0.12) at the end of the year, in time for immediate
reinvestment.
• Investment B is only available in the beginning of year 2 and its maturity period is 2 years. Each
dollar invested in B at the beginning of year 2 returns $1.30 two years later.
Formulate this investment planning problem as a linear programming model for your uncle to
maximize the amount of money that can be accumulated at the end of three years. You may
implement this problem into excel directly.
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