management science assignment

4. . You have to solve the assignment by using Excel.

5. . Name yo ur f i l e as " Yo ur ID_ Ass 1 " and submit i t in D 2 L.

Assignment I: 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 fifth year.

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. (6 marks)

B: Solve your investment LP model using Excel-Solver and obtain the optimal solution. (2 marks)