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Some banks now compound daily, but report only on a

Probability and Statistical Inference | 9th Edition | ISBN: 9780321923271 | Authors: Robert V. Hogg, Elliot Tanis, Dale Zimmerman ISBN: 9780321923271 41

Solution for problem 17E Chapter 3.4

Probability and Statistical Inference | 9th Edition

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Probability and Statistical Inference | 9th Edition | ISBN: 9780321923271 | Authors: Robert V. Hogg, Elliot Tanis, Dale Zimmerman

Probability and Statistical Inference | 9th Edition

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Problem 17E

Problem 17E

Some banks now compound daily, but report only on a quarterly basis. It seems to us that it would be easier to compound every instant, for then a dollar invested at an annual rate of i for t years would be worth eti. [You might find it interesting to prove this statement by taking the limit of (1 + i/n)nt as n→∞.] If X is a random rate with pdf f (x) = ce −x, 0.04 < x < 0.08, find the pdf of the value of one dollar after three years invested at the rate of X.

Step-by-Step Solution:

Answer :

Step 1 of 3 :

Given, some banks now report only on a quarterly basis, but compound daily.

It can be easier to compound every instant, for then a dollar invested at an annual rate f i for t years would be worth  e.

Rete bo deposit is X and period of deposit is 3 years.

Let X be a random rate with pdf  f(x) = c ,  0.04 < x < 0.08.

Y =

The claim is to find the pdf value of one dollar after three years invested at the rate of X.



Step 2 of 3

Chapter 3.4, Problem 17E is Solved
Step 3 of 3

Textbook: Probability and Statistical Inference
Edition: 9
Author: Robert V. Hogg, Elliot Tanis, Dale Zimmerman
ISBN: 9780321923271

Since the solution to 17E from 3.4 chapter was answered, more than 286 students have viewed the full step-by-step answer. This textbook survival guide was created for the textbook: Probability and Statistical Inference , edition: 9. This full solution covers the following key subjects: rate, compound, pdf, years, invested. This expansive textbook survival guide covers 59 chapters, and 1476 solutions. Probability and Statistical Inference was written by and is associated to the ISBN: 9780321923271. The full step-by-step solution to problem: 17E from chapter: 3.4 was answered by , our top Statistics solution expert on 07/05/17, 04:50AM. The answer to “Some banks now compound daily, but report only on a quarterly basis. It seems to us that it would be easier to compound every instant, for then a dollar invested at an annual rate of i for t years would be worth eti. [You might find it interesting to prove this statement by taking the limit of (1 + i/n)nt as n??.] If X is a random rate with pdf f (x) = ce ?x, 0.04 < x < 0.08, find the pdf of the value of one dollar after three years invested at the rate of X.” is broken down into a number of easy to follow steps, and 98 words.

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Some banks now compound daily, but report only on a