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Smith invests $5,000 at t = 0 into a fund which earns interest under the following model: (0.06 8(t) = 0.03t 0

Smith invests $5,000 at t = 0 into a fund which earns interest under the following model: (0.06 8(t) = 0.03t 0

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Smith invests $5,000 at t = 0 into a fund which earns interest under the following model: %3D (0.06 8(t) = {0.03t (0.03t + at² 0 <t< 5 5 <t< 10, 10 <t where a is a constant. It is known that the force of interest at t = 20 is 10 times as much as the force of interest at t 6. Find the accumulated value at t = 15 of this deposit. (Hint: find the constant a first.)
Transcribed Image Text:Smith invests $5,000 at t = 0 into a fund which earns interest under the following model: %3D (0.06 8(t) = {0.03t (0.03t + at² 0 <t< 5 5 <t< 10, 10 <t where a is a constant. It is known that the force of interest at t = 20 is 10 times as much as the force of interest at t 6. Find the accumulated value at t = 15 of this deposit. (Hint: find the constant a first.)
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