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Q: Linear Program ( No Answer,   1 Comment )
Question  
Subject: Linear Program
Category: Science > Math
Asked by: shaherome-ga
List Price: $2.00
Posted: 31 Jan 2006 11:56 PST
Expires: 02 Feb 2006 11:11 PST
Question ID: 439733
Sam has $3000 to invest over the next 5 years. At the beginning of
each year he can invest money in 1 or 2 year time deposits.The bank
pays 4% interest on 1 year time deposits and 9% (total) on 2 year time
deposits. In addition, Globe Investments will offer 3 year
certificates starting at the begining of the second year.These
certificates will return 15 % (total). If sam reinvests his money that
is availble every year, formulate a linear program so that to maximize
his total cash on hand at the end of the 5th year.
Answer  
There is no answer at this time.

Comments  
Subject: Re: Linear Program
From: shields-ga on 01 Feb 2006 19:47 PST
 
You can think of the per-year return on the second investment option
as 4.403%*, and the per-year return on the Globe option as 4.769%**. 
So you want to get into the Globe program ASAP.  Your best bet is
therefore to put all your money into the 2-year plan followed by the
Globe plan.  This will give you $3760.50 in the end.

-Nate 

*from the square root of 1.09
** from the cube root of 1.15

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