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QUESTION
Rich Wannabee holds a $1000 ond that pays $80 every year. Rich is not reinvesting the interest, so the value of his investment appreciates linearly.
Rich Wannabee holds a $1000 ond that pays $80 every year. Rich is not reinvesting the interest, so the value of his investment appreciates linearly. He would like to switch to a continuously compounded investment that returns 6.25% per year. How long should he hold his bond before he sells it for face value and reinvests everything into a continuously compounded account?
