Industry 4.0 End Term: 10 May 2026 (January 2026 term)

Suppose you want to invest $4000 now and$2000 at the start of years 2 to 4. The interest rate offered by First Bank is 8% compounded annually, and the bonuses over the next 4 years are 1.8%, 1.7%, 2.1% and 2.5%, respectively. The annual interest rate offered by Second Bank is 0.2% lower than that of First Bank, but its bonus is 0.5% higher. The objective is to maximize the accumulated capital at the end of 4 years. If you apply Dynamic Programming to this problem, answer the given subquestions:

How is a stage represented by?

Suppose you want to invest $4000 now and$2000 at the start of years 2 to 4. The interest rate offered by First Bank is 8% compounded annually, and the bonuses over the next 4 years are 1.8%, 1.7%, 2.1% and 2.5%, respectively. The annual interest rate offered by Second Bank is 0.2% lower than that of First Bank, but its bonus is 0.5% higher. The objective is to maximize the accumulated capital at the end of 4 years. If you apply Dynamic Programming to this problem, answer the given subquestions:

What are the alternatives in a stage?

Suppose you want to invest $4000 now and$2000 at the start of years 2 to 4. The interest rate offered by First Bank is 8% compounded annually, and the bonuses over the next 4 years are 1.8%, 1.7%, 2.1% and 2.5%, respectively. The annual interest rate offered by Second Bank is 0.2% lower than that of First Bank, but its bonus is 0.5% higher. The objective is to maximize the accumulated capital at the end of 4 years. If you apply Dynamic Programming to this problem, answer the given subquestions:

How state variable is defined for this problem?