Concept explainers
The highest value of investment from
For
Explanation:
Consider the invested amount
Now, the formula for continuous compounding is:
Where
Now,
Now, replace
Now,
Now, replace r by 2r in the equation
Now,
Now, replace
Now, take natural log on both sides of the equation
According to the inverse property of logarithmic functions:
Hence,
Now, take natural log on both sides of the equation
According to inverse property of logarithmic functions:
Hence,
Now, take natural log on both sides of the equation
According to the inverse property of logarithmic functions:
Hence,
Now, if
Then, clearly from equation
Now, if
Then, clearly from equation
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