Question: Suppose a rich uncle has left you A0 dollars which is invested at rate r compounded continuously. Show that if you make withdrawals amounting to

Suppose a rich uncle has left you A0 dollars which is invested at rate r compounded continuously. Show that if you make withdrawals amounting to d dollars per year (where d > r A0) the time required to deplete the account to zero is

What happens to the account when the annual withdrawal is not greater than r A0?

In d- r Ao.

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Setting A t 0 and solving for t gives When d rA 0 this equation is undefined as we have division by ... View full answer

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