PROBLEM 1: Bond Portfolio for Early Retirement

Boris is turning 57 and plans to retire early at the end of the year. He will start receiving his pension when he turns 64, i.e., in 7 years. He has some savings and plans to invest in bonds to guarantee a stream of income for the next 6 years (age 58 through 63). Specifically, he aims at starting at $64,000 next year and then each year receiving $2,000 less than the previous year, ending up with $54,000 when he is 63. Boris can invest in a number of bonds, all of which have face value $1,000, described as follows: