Compound continuously which is the better investment

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Reference no: EM131269880

Refer to Problem. Which is the better investment if the rate of the income from the business is f(t) = 2,250.

Problem
An investor has $10,000 to invest in either a bond that matures in 5 years or a business that will produce a continuous stream of income over the next 5 years with rate of flow f(x) = 2,150.

If both the bond and the continuous income stream earn 3.75%, compounded continuously, which is the better investment?

Reference no: EM131269880

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