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Tomorrow a sum of PhPI0,000 will be invested at rate R. Tomorrow's rate is unknown at the moment, so suppose R has a uniform distribution from 0.02 to 0.04. The PHP10,000 will be compounded instantaneously for one year so U = h(R) = 10000e*. a) Use the transformation technique to derive the pdf of U. b) Find E(U), the expected amount of the investment after one year.

Tomorrow a sum of PhPI0,000 will be invested at rate R. Tomorrow's rate is unknown at the moment, so suppose R has a uniform distribution from 0.02 to 0.04. The PHP10,000 will be compounded instantaneously for one year so U = h(R) = 10000e*. a) Use the transformation technique to derive the pdf of U. b) Find E(U), the expected amount of the investment after one year.

College Algebra
College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter6: Exponential And Logarithmic Functions
Section: Chapter Questions
Problem 8RE: Suppose an investment account is opened with aninitial deposit of 10,500 earning 6.25...
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1. Tomorrow a sum of PHP10,000 will be invested at rate R. Tomorrow's rate is unknown at the moment, so suppose R has a uniform distribution from 0.02 to 0.04. The PHP10,000 will be compounded instantaneously for one year so U = h(R) = 10000e. a) Use the transformation technique to derive the pdf of U. b) Find E(U), the expected amount of the investment after one year.
Transcribed Image Text:1. Tomorrow a sum of PHP10,000 will be invested at rate R. Tomorrow's rate is unknown at the moment, so suppose R has a uniform distribution from 0.02 to 0.04. The PHP10,000 will be compounded instantaneously for one year so U = h(R) = 10000e. a) Use the transformation technique to derive the pdf of U. b) Find E(U), the expected amount of the investment after one year.
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