Compute the equilibrium solution weq of the de

Reference no: EM13204338

GreenWealth Incorporated is an investment company whose financial assets grow at a continuous rate of 4%. (Pretend the last year or so didn't happen.) From this must be deducted its expenses?payroll, rent, etc amounting to $200 million per year, which we shall assume has to be paid at a steady, continuous rate.

(a) Let W(t) be the net worth of GreenWealth (that is, assets - expenses) at time t, where t is measured in years and W in millions of dollars. Derive a difierential equation for W(t).

(b) Find the equilibrium solution Weq of the DE, and interpret it in ?financial terms.

(d) Is the equilibrium solution stable?

Reference no: EM13204338

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