A $4000 initial deposit in a bank account grows continuously according to the formula B(t)=4000e^0.05t ,where B is the amount in the bank t years after 2012. Would you rather have the investment initially describe or the $4000 but invested at an interest rate of 6% compounded monthly? Why?
A $4000 initial deposit in a bank account grows continuously according to the formula B(t)=4000e^0.05t ,where B is the amount in the bank t years after 2012. Would you rather have the investment initially describe or the $4000 but invested at an interest rate of 6% compounded monthly? Why?
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
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A $4000 initial deposit in a bank account grows continuously according to the formula B(t)=4000e^0.05t ,where B is the amount in the bank t years after 2012. Would you rather have the investment initially describe or the $4000 but invested at an interest rate of 6% compounded monthly? Why?
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