Refer to Problem. Which is the better investment if the rate of the income from the business is f(t)= 2,250.
Problem
An investor has $10,000 to invest in either a bond that matures in 5 years or a business that will produce a continuous stream of income over the next 5 years with rate of flow f(t)= 2,150.
If both the bond and the continuous income stream earn 3.75%, compounded continuously, which is the better investment?