Write down the differential equation governing investment

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Reference no: EM132055792

You are a wealthy individual who has money to invest. You decide to make a one-time investment in a hedge fund with the goal that in 10 years your investment will be worth exactly one million dollars.

The hedge fund promises a 10 percent annual return, and it charges a flat fee of $15,000 per year to participate.

Write down the differential equation governing your investment, y(t), in dollars, at time t > 0, in years, for an arbitrary initial value of y_0 at time t = 0.

Determine the (minimum) initial investment y₀ that will achieve your goal.

[Assume continuous compounding of returns and continuous payment of the fee.]

Reference no: EM132055792

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