Question
An investor is presented with a choice of two investments: an established furniture store and a new book store. Each choice requires the same initial
An investor is presented with a choice of two investments: an established furniture store and a new book store. Each choice requires the same initial investment and each produces a continuous income stream of 5%, compounded continuously. The rate of flow of income from the furniture store is f(t)=16,000, and the rate of flow of income from the book store is expected to be g(t)=15,000e^0.04t. Compare the future values of these investments to determine which is the better choice over the next 3 years.
The future value of the clothing store is $
(Round to the nearest dollar as needed.)
The future value of the book store is $
(Round to the nearest dollar as needed.)
Which store is the better investment over the next 3 years?
Book or Clothing
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