Suppose that $100,000 from a retirement account is invested in a large cap stock fund. After 25 yr, the value is $192,346.75. (a) Use the model A=Pe'" to determine the average rate of return under continuous compounding. Round to the nearest tenth of a percent. Avoid rounding in intermediate steps. (b) How long will it take the investment to reach one-quarter million dollars? Round to the nearest tenth of a year. Round values in intermediate steps to three decimal places.
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 5 images
