Confused about how to solve this, any help is appreciated.
4) Jack's mother is going to set up a bank account for his son. She is planning to put $105,000 in the bank account. Jack is going to spend this money to pay for his school expenses in the next four years. Jack wants to use this money as efficiently as possible so that he can have some money left in the account to pay for a down payment of a new car after graduation. Jack's expenses during his school years are expected to be as follows. These expenses are due to the beginning of their respective years. Year Expense 1 $35,000 2 $28,000 3 $23,000 4 $24,000 Jack considers two bond investment options at the beginning of his first year at school: Bond Current Annual rate Years to Par value price of return maturity 1 $1200 5% 2 $1000 2 $1100 6% 3 $1000 Funds not invested in bonds will be placed in savings with an annual interest rate of 2%. Which investment strategy should Jack follow to maximize the amount of money he will have in the account for the down payment of a new car at the end of his fourth year? a) [2 points] Define the variables. b) (17 points] Write the complete formulation of the problem. c) [6 points] Solve the problem in Excel Solver, and submit your Excel file in Canvas. State the optimal solution of the problem here. 4) Jack's mother is going to set up a bank account for his son. She is planning to put $105,000 in the bank account. Jack is going to spend this money to pay for his school expenses in the next four years. Jack wants to use this money as efficiently as possible so that he can have some money left in the account to pay for a down payment of a new car after graduation. Jack's expenses during his school years are expected to be as follows. These expenses are due to the beginning of their respective years. Year Expense 1 $35,000 2 $28,000 3 $23,000 4 $24,000 Jack considers two bond investment options at the beginning of his first year at school: Bond Current Annual rate Years to Par value price of return maturity 1 $1200 5% 2 $1000 2 $1100 6% 3 $1000 Funds not invested in bonds will be placed in savings with an annual interest rate of 2%. Which investment strategy should Jack follow to maximize the amount of money he will have in the account for the down payment of a new car at the end of his fourth year? a) [2 points] Define the variables. b) (17 points] Write the complete formulation of the problem. c) [6 points] Solve the problem in Excel Solver, and submit your Excel file in Canvas. State the optimal solution of the problem here
