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 1 0.82% 0.88% 2 1.81% 1.93% 3 2.53% 4 3.81% 3.84% 5 5.46% 6 6.42% 7.05% 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 each investment. Create an Excel model to determine the optimum solution to meet the required payments.
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 1 0.82% 0.88% 2 1.81% 1.93% 3 2.53% 4 3.81% 3.84% 5 5.46% 6 6.42% 7.05% 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 each investment. Create an Excel model to determine the optimum solution to meet the required payments.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text: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
1
0.82%
0.88%
2
1.81%
1.93%
3
2.53%
4
3.81%
3.84%
5
5.46%
6
6.42%
7.05%
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
each investment. Create an Excel model to determine the optimum solution to meet the
required payments.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education