Asked by Clarence
Choice 1: Payments of $ 2650 now, $ 3100 a year from now, and $ 3610 two years from now.
Choice 2: Three yearly payments of $ 3100 starting now.
Assume interest is compounded continuously.
What is the interest rate that would make both choices equally lucrative?
Choice 2: Three yearly payments of $ 3100 starting now.
Assume interest is compounded continuously.
What is the interest rate that would make both choices equally lucrative?
Answers
Answered by
Reiny
3610 + 3100 e^i + 2650 e^2i = 3100 + 3100 e^i + 3100 e^2i
let x = e^i and simplify
45x^2 = 510
x^2 = 17/15
find x, from there you can find e^i , then i
let x = e^i and simplify
45x^2 = 510
x^2 = 17/15
find x, from there you can find e^i , then i
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