Reference no: EM13590131

John Fixx, a master plumber, is considering a five year investment plan using the $2200 windfall from his last job in which he was able to parlay a leaky faucet into a major operation by strategically breaking a series of pipes and valves. At the beginning of each year he can invest money in one or two year time deposits. The bank pays 8% interest on one year deposits and 17% (total) on two year deposits. In addition, John has learned that West World Ltd. will be offering three year certificates starting at the beginning of the second year of John's plan. These certificates will return 27% (total). If Fixx reinvests his money every year formulate and solve the LP that will determine the investment strategy that will maximize John's total cash at the end of five years. There is a substantial penalty for early withdrawal from any of the investments so John will not consider any investment that matures beyond the end of the fifth year.