After Grand Nagus Zek hands the throne to Rom to be head of the Ferengi Alliance, Rom decides that a more prudent move would be to switch from a commidity based currency (gold pressed latinum) to the Oo-Max, which is a fiat currency. He sets the initial money supply at 2 trillion Oo-Max, and to ensure some degree of monetary stability, wants to let the Ferengi Central Bank aim for a target growth rate of 2% per year. He wants to let the money growth over time subject to the following money supply function Mt = M0eµt where Mt is the money supply after t years, M0 is the initial stock of money, ex is the exponential function, µ is the growth rate of money, and t is the number of years after the initial stock of money is set. What is the money supply after 5 years?
After Grand Nagus Zek hands the throne to Rom to be head of the Ferengi
Alliance, Rom decides that a more prudent move would be to switch from a commidity based currency (gold pressed latinum) to the Oo-Max, which is a fiat currency. He sets the initial money supply at 2 trillion Oo-Max, and to ensure some degree of monetary stability, wants to let the Ferengi Central Bank aim for a target growth rate of 2% per year. He wants to let the money growth over time subject to the following money supply function
Mt = M0eµt
where Mt is the money supply after t years, M0 is the initial stock of money, ex is the exponential function, µ is the growth rate of money, and t is the number of years after the initial stock of money is set.
What is the money supply after 5 years?
Money supply: It consisted of all the money in an economy that is either being held by the public or the money that the public has kept in the financial institutions.
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