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January 25th, 2011, 05:59 PM  #1 
Senior Member Joined: Sep 2009 Posts: 251 Thanks: 0  Op. Res: What next? Operations Research Questions: You have $5000 to invest for five years. At the beginning of each year, you can invest in one or twoyear bond at 4% and 9% total interest, respectively. At the start of the second year, you can invest in threeyear 15% total interest bond. Find a linear program to maximize total cash after five years. My answer (so far): : amount available to invest end of year i ($); i=0,1,2,3,4,5 : amount invested at end of year i in jlength bonds ($); i=0,1,2,3,4; j=1,2,3 ex: x_{0,1} is the amount invested at the end of year 0 (beginning of year 1) in 1year bonds Objective: Maximize . Constraints: The amount of money available at end of year i equals the amount of money invested in 1, 2, and 3 year bonds at the end of year i: The amount of money available at end of year i equals the amount of money rolling off investments from 1, 2, and 3 years earlier: Equate the s (and rearrange a little bit): So what's next? I have 5 equations and 15 unknowns. I've tried thinking of ways to substitute to reduce variables, but can't find any. My classmate says it's five equations and five unkowns. TIA. 