# Using Excel Solver : Maximizing Interest and Defining Cash-Flow Constraints

Not what you're looking for?

At the start of the year a company wants to invest excess cash in one-month, three-month and six-month CD's. The company is somewhat conservative and wants to make sure it has a safety margin of cash on hand each month. (left over from previous month/ available at the outset, plus principal and interest from CD's that have become due, minus investments made at the start of the month, must be no less than the safety margin.)

These are the safety margins:

Jan $175,000

Feb $90,000

Mar $80,000

Apr $180,000

May $150,000

June $85,000

How should it maximize total earned interest? Given that Three-month CD's can only be bought in Jan and April; six-month CD's can only be bought in January.

Initial cash available is 400,000

1-mo CD's 1.0% 1 $2,000 Jan thru June

2-mo CD's 4.0% 3 $3,000 Jan and April

3-mo CD's 9.0% 6 $5,000 Jan

What are the decision variables and the object function?

Define cash flow constraints

##### Purchase this Solution

##### Solution Summary

Excel Solver is used to Maximize Interest and Define Cash-Flow Constraints. The solution is detailed and well presented. The response was given a rating of "5/5" by the student who originally posted the question.

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Exponential Expressions

In this quiz, you will have a chance to practice basic terminology of exponential expressions and how to evaluate them.

##### Solving quadratic inequalities

This quiz test you on how well you are familiar with solving quadratic inequalities.

##### Know Your Linear Equations

Each question is a choice-summary multiple choice question that will present you with a linear equation and then make 4 statements about that equation. You must determine which of the 4 statements are true (if any) in regards to the equation.

##### Multiplying Complex Numbers

This is a short quiz to check your understanding of multiplication of complex numbers in rectangular form.

##### Geometry - Real Life Application Problems

Understanding of how geometry applies to in real-world contexts