Nick has lost faith in the banks, and has decided to diversify his portfolio by keeping some money under his mattress. He decides to put $2500 under his mattress and $3000 in a GIC with a 12% annual interest rate (compounded continuously). If there is a 8% annual inflation rate, when will the real value of Nick's investments be at a minimum? NOTE: An inflation rate of 8% means that the real value of money is decreasing at this rate (compounded continuously). You should also consider what inflation does to the interest rate. If I (t) is the total real value of the investments after t years: I(t) = If t* is the number of years until the value of the assets is a minimum: NOTE: Use at least one decimal in your answer.
Nick has lost faith in the banks, and has decided to diversify his portfolio by keeping some money under his mattress. He decides to put $2500 under his mattress and $3000 in a GIC with a 12% annual interest rate (compounded continuously). If there is a 8% annual inflation rate, when will the real value of Nick's investments be at a minimum? NOTE: An inflation rate of 8% means that the real value of money is decreasing at this rate (compounded continuously). You should also consider what inflation does to the interest rate. If I (t) is the total real value of the investments after t years: I(t) = If t* is the number of years until the value of the assets is a minimum: NOTE: Use at least one decimal in your answer.
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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Transcribed Image Text:Nick has lost faith in the banks, and has decided to diversify his portfolio by keeping some money under his
mattress. He decides to put $2500 under his mattress and $3000 in a GIC with a 12% annual interest rate
(compounded continuously). If there is a 8% annual inflation rate, when will the real value of Nick's investments be
at a minimum?
NOTE: An inflation rate of 8% means that the real value of money is decreasing at this rate (compounded
continuously). You should also consider what inflation does to the interest rate.
If I (t) is the total real value of the investments after t years:
I(t) =
If t* is the number of years until the value of the assets is a minimum:
-0
NOTE: Use at least one decimal in your answer.
t* =
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