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An investor has ​$10500 to invest in either a bond that matures in 6 years or a business that will produce a continuous stream of income over the next 6 years with rate of flow ​f(t)=1750. If both the bond and the continuous stream earn 7​%, compounded​ continuously, which is the better​ investment?

An investor has ​$10500 to invest in either a bond that matures in 6 years or a business that will produce a continuous stream of income over the next 6 years with rate of flow ​f(t)=1750. If both the bond and the continuous stream earn 7​%, compounded​ continuously, which is the better​ investment?

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter5: Inverse, Exponential, And Logarithmic Functions
Section5.3: The Natural Exponential Function
Problem 40E
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Question
An investor has
​$10500
to invest in either a bond that matures in
6
years or a business that will produce a continuous stream of income over the next
6
years with rate of flow
​f(t)=1750.
If both the bond and the continuous stream earn
7​%,
compounded​ continuously, which is the better​ investment?
 
 
 

Question content area bottom

Part 1
What is the future value of the​ bond?
 
​$enter your response here  
​(Round to the nearest dollar as​ needed.)
Part 2
What is the future value of the continuous income​ stream?
 
​$enter your response here  
​(Round to the nearest dollar as​ needed.)
Part 3
Which is the better​ investment?
 
A.
They are exactly the​ same, and will earn the same amount.
 
B.
The business is a better investment.
 
C.
The bond is a better investment.
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