This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: a(t) = 1 + 0.001t3 . Investment 2 has an accumulation function of a(t) = 1 + 0.01t2 . a. Which investment should Poppy use if Poppy will be investing for 5 years. Explain why. b. Which investment should Poppy use if Poppy will be investing for 15 years. Explain why. c. If Poppy invests 100 into both investments, at what time will the accumulated value of both investments be equal. 9. Book Problem 1.3, Number 5 10. Book Problem 1.3, Number 6 Answers 1. 751,500 2. 6558 3. 6.8619 4. 64.0025 5. a. 1000 b. 200 c. 1.2 d. 0.20 6.a. 168 b. 0.07348 c. 0.15068 7. α=1;β=0.10;δ=0.05 8. a. Investment 2 is better for 5 years as a(5) for Investment 2 is 1.25 while it is only 1.125 for Investment 1 b. Investment 1 is better for 15 years as a(15) for Investment 1 is 4.375 while it is only 3.25 for Investment 2 c. 10 years 9. n(n 1)/2 10. 2^(n+1) 2...
View
Full Document
 Spring '08
 Staff
 Math, Capital accumulation, Poppy, Saving, accumulation function

Click to edit the document details