1. How much does a $10 investment with an annual interest rate of 6% pay back after 3 years, using continuous compounding of interest?
2. What is the profit to the investor if the investment is paid back in full? What is the profit to the investor if the investment is not paid back in full?
3. What is the maximum profit of a $1 investment in any loan in the testing set?
4. What is the average profit of a $1 investment in one of these high-interest loans? What proportion of the high-interest loans were not paid back in full?
5. What is the profit of an investor who invested $1 in each of these 100 loans? How many of the 100 selected loans were not paid back in full? How does this compare to the simple strategy of investing in all loans, which yielded a profit of $20.94 for a $100 investment?

Answer rating: 100% (QA)

Answer Lets solve this stepbystep 1 Continuous Compounding Formula A Pert Where A Final amount P Ini... View the full answer