Recommendation:

This case study which aims to determine the amount to be invested with regards to specific kind
of cash equivalents in appointed rates of return, can be effectively recommended to those individuals
who desire to maximize their profit through an initial investment.

Recommended initial investments to maximize profit to 689542.5988.

a. Initial Investment for Two-Month Government Bonds (3%)

1st Month
Investment 3200000
Monthly Return (3200000x0.03) 96000
Total 3296000

2nd Month
Investment 0
-----------------------------------------------------------------------------
Monthly Return (0x0.03) 0
st
Add: 1 Month 3296000
Total 3296000

3rd Month
Investment 1955783.8847
-----------------------------------------------------------------------------
Monthly Return (1955783.8847x0.03) 58673.5165
nd
Add: 2 Month 3296000
Total: 3352673.5165

4th Month
Investment 1244216.1153
-----------------------------------------------------------------------------
Monthly Return (1244216.1153x0.03) 37326.4835
rd
Add: 3 Month 3352673.5165
Total: 3392000
 For the first month, 3200000 is to be invested bearing a return of 96000. Then on the
following month, there will be no investment to be made. With 1955783.8847 investment on
the third month, the return will be 58673.5165. Total profit for the government bonds will be
192000, if 1244216.1153 is to be invested on the fourth month and gained 37326.4834.

b. Initial Investment for Three-Month Government Bills (6.5%)

1st Month
Investment 3200000
Monthly Return (3200000x0.065) 208000
Total 3408000

2nd Month
Investment 0
-----------------------------------------------------------------------------
Monthly Return (0x0.03) 0
st
Add: 1 Month 3408000
Total 3408000

3nd Month
Investment 0
-----------------------------------------------------------------------------
Monthly Return (0x0.03) 0
nd
Add: 2 Month 3408000
Total 3408000

4nd Month
Investment 320000
-----------------------------------------------------------------------------
Monthly Return (320000x0.03) 208000
rd
Add: 3 Month 3408000
Total 3616000
 For the first month, 3200000 is to be invested bearing a return of208000. Then on the
2 and 3rd month, there will be no investment to be made. Total profit for the government
nd

bonds will be 416000, if 3200000 is to be invested on the fourth month and gained another
208000.

c. Initial Investment for Bank Deposits (1%)

1st Month
Investment 1600000
Monthly Return (1600000x0.01) 16000
Total 1616000

2nd Month
Investment 1616000
-----------------------------------------------------------------------------
Monthly Return (1616000x0.01) 16160
st
Add: 1 Month 1616000
Total 1632160

3rd Month
Investment 2972376.1153
-----------------------------------------------------------------------------
Monthly Return (2972376.1153x0.01) 29723.7612
nd
Add: 2 Month 163216
Total 1661883.7612

4th Month
Investment 1965883.761
-----------------------------------------------------------------------------
Monthly Return (1965883.761x0.01) 19658.8376
rd
Add: 3 Month 1661883.7612
Total 1861542.5988
 For the first month,160000 is to be invested bearing a return of16000. Then on the
following month, 1616000 investment is to be made to gain a return of 16160. With
2972376.1153 investment on the third month, the return will be 29723.7612. Total profit for
the government bonds will be 81542.5988, if 1965883.761 is to be invested on the fourth month
and gained 19658.83761.

Therefore:

Initial Investments:

Government Bonds 3200000

Government Bills 3200000

Bank Deposits 1600000

Total Initial Investments 8000000

Total Amount on after 4th month:

Government Bonds 3392000

Government Bills 3616000

Bank Deposits 1861542.5988

Total 8689542.5988

Total Amount after 4th Month 8689542.5988

Total Initial Investments 8000000

Maximized Profit 689542.5988

Or can be illustrated as
Government Bonds:

1st Month 3200000 x0.03 = 90000

2nd Month 0 x0.03 = 0

3rd Month 1955783.8847 x0.03 = 58673.5165

4th Month 1244216.1153 x0.03 = 37326.4835

Total 192000

Government Bills:

1st Month 3200000 x0.065 = 208000

2nd Month 0 x0.065 = 0

3rd Month 0 x0.065 = 0

4th Month 3200000 x0.065 = 208000

Total 416000

Bank Deposits:

1st Month 1600000 x0.01 = 16000

2nd Month 1616000 x0.01 = 16160

3rd Month 2972376.1153 x0.01 = 29723.7612

4th Month 1965883.761 x0.01 = 19658.8376

Total 81542.5988