Hello i am having trouble solving this problem, Thanks. Suppose at any time, you can transfer all
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Hello i am having trouble solving this problem, Thanks. Suppose at any time, you can transfer all of your money between two accounts. One account credits simple interest with an annual interest rate of 5%. The other account is an account that is governed by simple discount with an annual discount rate of 4%. You deposit 1000 at time t = 0. What is the maximum amount you can have at t = 3? HINT: In order to maximize the amount of your investment, it will be in your best interest to always have the money in the account that has the higher force of interest.
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