Compare the future values of given investments

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An investor is presented with a choice of two investments: an established clothing store and a new computer store.

Each choice requires the same initial investment and each produces a continuous income stream of 4%, compounded continuously. The rate of flow of income from the clothing store is f(t)=1,200.

and the rate of flow of income from the computer store is expected to be g(t) = 1,000e^0.05t. Compare the future values of these investments to determine which is the better choice over the next 5 years.

Reference no: EM131269864

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