(Probabilistic Inventory Models)

A business believes that its needs for cash during the next month are described by the random variable shown in Table 23. At the beginning of the month, the business has $10,000 available, and the business manager must determine how much of the money should be placed in an account bearing 24% annual interest. If any money must be withdrawn before the end of the month, all interest on the withdrawn money is forfeited, and a penalty equal to 2% of the withdrawn money must be paid. How much money should be placed in the 24% annual interest account?

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