To find: How should the money be reinvested?
Answer to Problem 18AYU
bonds, ; CD, .
Explanation of Solution
Given:
After 2 years, Betsy finds that she will now require per year. Assuming that the remaining information is the same.
Calculation:
In Problem(19) we have,
Assume she spent the interest for her subsistence:
Investment in bonds.
b:
Investment in CD:
So, bonds, ; CD, .
Proof (interest on 2 investments, ):
Assume she didn’t spend interest but kept it for reinvestment:
Investment in bonds-b:
Investment in CD:
So, bonds, ; CD, .
Proof (interest on 2 investments, ):
Chapter A.8 Solutions
Precalculus Enhanced with Graphing Utilities
Additional Math Textbook Solutions
Calculus: Early Transcendentals (3rd Edition)
Precalculus: Concepts Through Functions, A Unit Circle Approach to Trigonometry (4th Edition)
Glencoe Math Accelerated, Student Edition
University Calculus: Early Transcendentals (4th Edition)
Precalculus (10th Edition)
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