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You see the following rates (continuously compounded APRs). Suppose that someone came to you with an opportunity: they need $1,000 in 2 months to invest
You see the following rates (continuously compounded APRs). Suppose that someone came to you with an opportunity: they need $1,000 in 2 months to invest in a project. 2 months later (4 months from today) they will pay you back plus $6.62 of interest. Should you take the deal? If yes, what is the lowest interest payment you can accept for this deal?
1 month | 2 months | 3 months | 4 months | 5 months | 6 months |
2.60% | 2.75% | 2.85% | 2.93% | 2.98% | 3.00% |
*Please provide step by step instructions with any formulas if applicable*
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