The finance team is looking at some various CD and savings options to create a sinking

fund to pay for a planned facility expansion. They are going to need $$175,000$ at the end

of month $3,$ $$160,000$ at the end of month $4$ and $$120,000$ at the end of month $6.$

Marinette has been working with $2$ local banks; the following table outlines their current

return on various investments. $($Blanks note that that option is not available at that bank.$)$

Return

Term $($months$)$ Bank $1$ Bank $2$

$10\mathrm{.}87\%0\mathrm{.}87\%$

$21\mathrm{.}83\%1\mathrm{.}92\%$

$32\mathrm{.}52\%$

$43\mathrm{.}90\%3\mathrm{.}82\%$

$55\mathrm{.}41\%$

$66\mathrm{.}55\%7\mathrm{.}20\%$

The $1-$month investments noted in the table above each have a setup fee, Bank $1$ has a

$$400$ fee per investment, Bank $2$ charges $$600.$ This fee is charged at the beginning of

mcdaavet.doc

each investment. Create an Excel model to determine the optimum solution to meet the

required payments.