Assignment:
A friend wants to know how much money she will have at retirement if she invests $10,000 compounded continuously in a security that earns interest at 10(ten) percent per year. Identify the functional relationship of her balance on-account over time.
a) Compute the retirement balance if my friend is currently 50 yrs old and retires in exactly ten years.
b) Graph the balance on account against time and discuss or identify the effective yield of her security. How much does she earn on average in the fifth year? What’s the instantaneous rate?
c) If I find a higher yielding security paying 12(twelve) percent but compounded quarterly should she reconsider? Define the effective yield and compare this figure to the average rate of change.
Provide complete and step by step solution for the question and show calculations and use formulas.