Intermediate Algebra
Intermediate Algebra
19th Edition
ISBN: 9780998625720
Author: Lynn Marecek
Publisher: OpenStax College
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A scammer offers you a "deal" by which you can invest your money with them and earn returns. The scammer
"explains": "you actually earn the same return that the S&P500 produces on a given day and a premium which is
directly proportional to the value of your investment that day".
After rejecting the scammer's proposal, you were left curious to model the ludicrous scheme of the scammer. At
home, you work out the numbers in your computer: you call I(t) the value of an investment that follows the
scammer's, with t in days; and you denote by S(t) the return rate of the S&P500 (e.g. if the S&P went up 3% on a
day to, then S(to) = 0.03). Which of the following differential equations models the scammer's scheme?
dI
dt
dt
dt
dI
dt
=
=
(S(t) + K)I(t)
KS(t)I(t)
S(t) + KI(t)
(1 + S(t) + K)I(t)
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Transcribed Image Text:A scammer offers you a "deal" by which you can invest your money with them and earn returns. The scammer "explains": "you actually earn the same return that the S&P500 produces on a given day and a premium which is directly proportional to the value of your investment that day". After rejecting the scammer's proposal, you were left curious to model the ludicrous scheme of the scammer. At home, you work out the numbers in your computer: you call I(t) the value of an investment that follows the scammer's, with t in days; and you denote by S(t) the return rate of the S&P500 (e.g. if the S&P went up 3% on a day to, then S(to) = 0.03). Which of the following differential equations models the scammer's scheme? dI dt dt dt dI dt = = (S(t) + K)I(t) KS(t)I(t) S(t) + KI(t) (1 + S(t) + K)I(t)
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