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1. An investor puts 100 into fund X at time zero and 100 into fund Y at time zero. Fund X accumulates according to compound interest with an annual effective rate of i. Fund Y accumulates according to simple interest with an annual effective rate 1.1i. At the end of four years, the amount in fund X is equal to the amount in fund Y. Find the amount fund Y exceeds the amount in fund X at the end of two years. Assume that i + 0.

1. An investor puts 100 into fund X at time zero and 100 into fund Y at time zero. Fund X accumulates according to compound interest with an annual effective rate of i. Fund Y accumulates according to simple interest with an annual effective rate 1.1i. At the end of four years, the amount in fund X is equal to the amount in fund Y. Find the amount fund Y exceeds the amount in fund X at the end of two years. Assume that i + 0.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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1. An investor puts 100 into fund X at time zero and 100 into fund Y at time zero. Fund X accumulates according to compound interest with an annual effective rate of i. Fund Y accumulates according to simple interest with an annual effective rate 1.1i. At the end of four years, the amount in fund X is equal to the amount in fund Y. Find the amount fund Y exceeds the amount in fund X at the end of two years. Assume that i + 0.
Transcribed Image Text:1. An investor puts 100 into fund X at time zero and 100 into fund Y at time zero. Fund X accumulates according to compound interest with an annual effective rate of i. Fund Y accumulates according to simple interest with an annual effective rate 1.1i. At the end of four years, the amount in fund X is equal to the amount in fund Y. Find the amount fund Y exceeds the amount in fund X at the end of two years. Assume that i + 0.
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