Posted by **nic** on Thursday, September 16, 2010 at 5:10pm.

Choice 1: Payments of $ 2600 now,

$3000 a year from now, and $3450 two years from now.

Choice 2: Three yearly payments of $ 3000 starting now.

Interest is compounded continuously.

(a) If the interest rate on savings were 4.76 %,which would you prefer?

(b) What is the interest rate that would make both choices equally lucrative?

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