In the insurance problem discussed in section 8.8 of this chapter, suppose that Thom is confident that he can invest his money to earn a 15% annual rate of return compounded quarterly. Assuming a fixed 15% return, suppose that he now wants to determine the minimum amount of money that he must invest for his after-tax earnings to cover the planned premium payments.

a. Make whatever changes are necessary to the spreadsheet and answer Thom’s question.

b. Is the model you solved linear or nonlinear? How can you tell?