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an individual has $25,000 to invest: $16,000 will be put into a low-risk mutual fund averaging 6.7% interest compounded monthly, and the remainder will be invested in a high-yield bound fund averaging 9.1% interest compounded continuously. (a) write an equation for the total amount, a, in the two investments after t years.

Respuesta :

The total value of the investment is [$16,000 x (1.00558)^12t] + [9000t e^0.091].

What is the total value of the investment?

The total amount of the investment after t years is the sum of the total value of the amount invested in the low-risk mutual fund and the amount invested in the high-yield bound fund.

FV = P (1 + r)^nm

Where:

  • FV = Future value
  • P = Present value
  • R = interest rate : 6.7 / 12 = 0.558%
  • m = number of compounding
  • N = number of years

$16,000 x (1.00558)^12t

The formula for calculating future value when there is continuous compounding is : A x e^r x N

Where:

  • A= amount invested = $25,000 - $16,000 = $9,000
  • e = 2.7182818
  • N = number of years
  • r = interest rate

9,000 x e^0.091 x t

9000t e^0.091

Total value of the investment = [$16,000 x (1.00558)^12t] + [9000t e^0.091]

To learn more about continuous compounding, please check: https://brainly.com/question/26476328

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