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 (2nd Edition)
Elementary Statistics: Picturing the World (7th Edition)
Pre-Algebra Student Edition
A First Course in Probability (10th Edition)
Algebra and Trigonometry (6th Edition)
- Calculus: Early TranscendentalsCalculusISBN:9781285741550Author:James StewartPublisher:Cengage LearningThomas' Calculus (14th Edition)CalculusISBN:9780134438986Author:Joel R. Hass, Christopher E. Heil, Maurice D. WeirPublisher:PEARSONCalculus: Early Transcendentals (3rd Edition)CalculusISBN:9780134763644Author:William L. Briggs, Lyle Cochran, Bernard Gillett, Eric SchulzPublisher:PEARSON
- Calculus: Early TranscendentalsCalculusISBN:9781319050740Author:Jon Rogawski, Colin Adams, Robert FranzosaPublisher:W. H. FreemanCalculus: Early Transcendental FunctionsCalculusISBN:9781337552516Author:Ron Larson, Bruce H. EdwardsPublisher:Cengage Learning