Please check the explanation for the wrong answer entered for PS9.1.1a and kindly provide your correct answers for PS9.1.1b

In lecture, Professor Gruber explained discrete compounding interest. Interest can also be compounded continuously. Here we explain the difference. Professor Gruber calculated future value as FV = P(1 + t, where P is the principal, 'r' is the interest rate, and t is the term of the contract [often in years). This formula can be generalized to FV = P(1 l r/m)\How many years should you hold the case of wine before selling it? {Consider only integer years. Suppose that interest is compounded discretely {annually}, not oontinuously.] 5 Explanation 100w\"? (mt Plugging in different integer values for t gives it = 5 as the optimum. You can graph The value (discounted back to the present) of selling it at time t is 100% (1.1)1 1001/41 mot/E 100)? II. 5 > '3 ' (1.1} [1.1] (1.1) We still haven't verified that the optimum yields a positive profit, though. We'll check that in a moment. to verify that the function is single-peaked, and then arithmetically verify that How much money will you receive for the case of wine at the time ofifs sale? 161.05 8 Answer: 100*sqrtl5] 161.05 Explanation The case will be worth 100$ m $223.61 at t = 5. What is the net present value of that investment? 90.91 Explanation In today's dollars, that's 323"\" (1.1)\" costs, so it is a good investment to buy it today. You'll make a profit of about $38.84. Thus, you should buy the case and hold it for 5 years. :3 138.84 in revenue. This is more than the $100 {in today's dollars) that it Problem PSQJJb Of3 points [graded] Let's consider the problem that is the continuous-time analog to the above discrete-time problem. This is perhaps a more realistic problem. Suppose interest is compounded continuously instead of discretely. You may again choose how many years to hold the case of wine before selling it but now suppose you can sell at any time, not just at the integer years. HOW many years should you hold the case of wine before selling it? l':}| HOW much money will you receive for the case of wine at the time ofifs sale? 141 X 141 What is the net present value of that investment? 100 X 100 Sme" You have used 'I of 2 attempts Save