a. A'(P) = (Type an exact answer in terms of e.) b. A'(4000) = (Round to the nearest cent as needed.) Interpret A'(4000) = 1.52 O A. The future value of a 13 vear investment of $4001 will be $ more than the future value of a 13 year investment of $4000. O B. The future value of a 13 year investment of $4000 will be $ more than the future value of a 13 year investment of $4000. O C. The future value of 12 year investment of $4000 at 4.5% will be $ more than the future value of a 12 year investment of $4000 at 3.5%. O D. The future value of a 12 year investment of $4001 will be $ more than the future value of a 12 year investment of $4000. c. A(4001) - A(4000) = dollars per year. (Round to the nearest cent as needed.)

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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You plan to invest in an account which pays 3.5% compounded continuously.
If the investment period is for 12 years, then A(P) = P e 0.035 · 12 = P e 0.42 gives the total balance of P dollars.
Find a formula for A'(P).
Find and interpret A'(4000).
Compare the approximation to the actual change.
a.
b.
С.
a. A'(P) =| (Type an exact answer in terms of e.)
b. A'(4000) =
%3D
(Round to the nearest cent as needed.)
Interpret A'(4000) = 1.52
O A. The future value of a 13 year investment of $4001 will be $
more than the future value of a 13 year investment of $4000.
O B. The future value of a 13 year investment of $4000 will be $
more than the future value of a 13 year investment of $4000.
O C. The future value of 12 year investment of $4000 at 4.5% will be $
more than the future value of a 12 year investment of $4000 at 3.5%.
O D. The future value of a 12 year investment of $4001 will be $
more than the future value of a 12 year investment of $4000.
c. A(4001) – A(4000) =
dollars per year. (Round to the nearest cent as needed.)
Transcribed Image Text:You plan to invest in an account which pays 3.5% compounded continuously. If the investment period is for 12 years, then A(P) = P e 0.035 · 12 = P e 0.42 gives the total balance of P dollars. Find a formula for A'(P). Find and interpret A'(4000). Compare the approximation to the actual change. a. b. С. a. A'(P) =| (Type an exact answer in terms of e.) b. A'(4000) = %3D (Round to the nearest cent as needed.) Interpret A'(4000) = 1.52 O A. The future value of a 13 year investment of $4001 will be $ more than the future value of a 13 year investment of $4000. O B. The future value of a 13 year investment of $4000 will be $ more than the future value of a 13 year investment of $4000. O C. The future value of 12 year investment of $4000 at 4.5% will be $ more than the future value of a 12 year investment of $4000 at 3.5%. O D. The future value of a 12 year investment of $4001 will be $ more than the future value of a 12 year investment of $4000. c. A(4001) – A(4000) = dollars per year. (Round to the nearest cent as needed.)
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