Nick has lost faith in the banks, and has decided to diversify his portfolio by keeping some money under his mattress. He decides to put $2500 under his mattress and $3000 in a GIC with a 12% annual interest rate (compounded continuously). If there is a 8% annual inflation rate, when will the real value of Nick's investments be at a minimum? NOTE: An inflation rate of 8% means that the real value of money is decreasing at this rate (compounded continuously). You should also consider what inflation does to the interest rate. If I (t) is the total real value of the investments after t years: I(t) = If t* is the number of years until the value of the assets is a minimum: NOTE: Use at least one decimal in your answer.

Nick has lost faith in the banks, and has decided to diversify his portfolio by keeping some money under his mattress. He decides to put $2500 under his mattress and $3000 in a GIC with a 12% annual interest rate (compounded continuously). If there is a 8% annual inflation rate, when will the real value of Nick's investments be at a minimum? NOTE: An inflation rate of 8% means that the real value of money is decreasing at this rate (compounded continuously). You should also consider what inflation does to the interest rate. If I (t) is the total real value of the investments after t years: I(t) = If t* is the number of years until the value of the assets is a minimum: NOTE: Use at least one decimal in your answer.

Intermediate Algebra

10th Edition

ISBN:9781285195728

Author:Jerome E. Kaufmann, Karen L. Schwitters

Publisher:Jerome E. Kaufmann, Karen L. Schwitters

Chapter11: Exponential And Logarithmic Functions

Section11.2: Applications Of Exponential Functions

Problem 27PS

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