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[See Steps] The value of good wine increases with age. Thus, if you are a wine dealer, you have the problem of deciding whether to sell your wine now, at a price

Question: The value of good wine increases with age. Thus, if you are a wine dealer, you have the problem of deciding whether to sell your wine now, at a price of $P a bottle, or to sell it later at a higher price. Suppose you know that the amount a wine-drinker is willing to pay for a bottle of this wine t years from now is \[\\(P(1+20\sqrt{t})\] . Assuming continuous compounding and a prevailing interest rate of 5% per year, when is the best time to sell your wine?

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Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document


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