New Exercise Bank Content Qu$.06-19$

Al Ferris has $$60,000$ that he wishes to invest now in order to use the accumulation for purchasing a retirement annuity in five years.

After consulting with his financial advisor, he has been offered four types of fixed$-$income investments, which we will label as

investments A$,$ B$,$ C$,$ and D$.$ Investments A and B are available at the beginning of each of the next five years $($call them years $1$ to $5).$

Each dollar invested in $A$ at the beginning of a year returns $$1\mathrm{.}40($a profit of $$0\mathrm{.}40)$ two years later $($in time for immediate

reinvestment$).$ Each dollar invested in $B$ at the beginning of a year returns $$1\mathrm{.}70$ three years later. Investments $C$ and $D$ will each be

available at one time in the future. Each dollar invested in C at the beginning of year $2$ returns $$1\mathrm{.}90$ at the end of year $5.$ Each dollar

invested in $D$ at the beginning of year $5$ returns $$1\mathrm{.}30$ at the end of year $5.$

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Formulate and solve a linear programming model for this problem on a spreadsheet.

a$.$ Which investment plan maximizes the amount of money that can be accumulated by the beginning of year $6?$

Note: Leave no cells blank. Enter $"$O$"$ wherever required.

b$.$ Determine the ending balance at Year $5.$