Question
The value of a fine bottle of wine over time is given by the function; V(t) =200e2t , where V = value in $, 200
- The value of a fine bottle of wine over time is given by the function;
V(t) =200e2t , where V = value in $, 200 = initial value and t is in years.
a) Solve this problem for t*, the optimal amount of time to keep the wine. Assume the interest rate is 'r'.
b) Check the second order conditions for this problem to verify that you have indeed found a maximum.
c) Suppose the interest rate, r = 4%. How long should the investor keep the wine?
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Calculus Single Variable
Authors: Howard Anton, Irl C Bivens, Stephen Davis
11th Edition
1118885686, 9781118885680
