Suppose that $100 is invested at the beginning of a year. Which (if either) of the following methods of growing the investment results in a larger amount at the end of the year? (i) The investment grows at an interest rate of 4% per year, compounded continuously. (ii) The investment grows at an instantaneous growth rate of 4% per year. method (i) method (ii) Both methods produce the same amount
Suppose that $100 is invested at the beginning of a year. Which (if either) of the following methods of growing the investment results in a larger amount at the end of the year? (i) The investment grows at an interest rate of 4% per year, compounded continuously. (ii) The investment grows at an instantaneous growth rate of 4% per year. method (i) method (ii) Both methods produce the same amount
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section11.5: Simulating Games Of Chance
Problem 36P: A martingale betting strategy works as follows. You begin with a certain amount of money and...
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Suppose that $100 is invested at the beginning of a year. Which (if either) of the following methods of growing the investment results in a larger amount at the end of the year?
(i) The investment grows at an interest rate of 4% per year, compounded continuously.
(ii) The investment grows at an instantaneous growth rate of 4% per year.
(ii) The investment grows at an instantaneous growth rate of 4% per year.
method (i)
method (ii)
Both methods produce the same amount.
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