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In general, which fund should you pick if you want to keep it invested for a very long time (e.g. longer than 15 years), Fund A or Fund B? Explain your reasoning. Would your answer be the same or different if you wanted to keep it invested for a very short period? Explain your reasoning.

In general, which fund should you pick if you want to keep it invested for a very long time (e.g. longer than 15 years), Fund A or Fund B? Explain your reasoning. Would your answer be the same or different if you wanted to keep it invested for a very short period? Explain your reasoning.

College Algebra
College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter9: Sequences, Probability And Counting Theory
Section9.4: Series And Their Notations
Problem 57SE: Karl has two years to save $10000 to buy a used car when he graduates. To the nearest dollar, what...
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In general, which fund should you pick if you want to keep it invested for a very long time (e.g. longer than 15 years), Fund A or Fund B?  Explain your reasoning.  Would your answer be the same or different if you wanted to keep it invested for a very short period?  Explain your reasoning.

You have won a scholarship fund. However, you must keep it as an investment for a period of time before you cash it in. You get to choose between 2 funds: Fund A: The initial value is $90,000 and interest rate is 6% per year, compounded continuously. Fund B: The initial value is $100,000. But the interest rate is only 5% per year, compounded continuously.
Transcribed Image Text:You have won a scholarship fund. However, you must keep it as an investment for a period of time before you cash it in. You get to choose between 2 funds: Fund A: The initial value is $90,000 and interest rate is 6% per year, compounded continuously. Fund B: The initial value is $100,000. But the interest rate is only 5% per year, compounded continuously.
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