You now have $10,000, and the following investmentplans are available to you during the next three years:■ Investment A: Every dollar invested now yields$0.10 a year from now and $1.30 three years fromnow.■ Investment B: Every dollar invested now yields $0.20 ayear from now and $1.10 two years from now.■ Investment C: Every dollar invested a year fromnow yields $1.50 three years from now.During each year, you can place uninvested cash inmoney market funds that yield 3% interest per year.However, you can invest at most $5000 in any one ofplans A, B, or C. Determine how to maximize yourcash on hand three years from now.

You now have $10,000, and the following investmentplans are available to you during the next three years:■ Investment A: Every dollar invested now yields$0.10 a year from now and $1.30 three years fromnow.■ Investment B: Every dollar invested now yields $0.20 ayear from now and $1.10 two years from now.■ Investment C: Every dollar invested a year fromnow yields $1.50 three years from now.During each year, you can place uninvested cash inmoney market funds that yield 3% interest per year.However, you can invest at most $5000 in any one ofplans A, B, or C. Determine how to maximize yourcash on hand three years from now.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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