Suppose you borrow $500 and you plan to pay it back all at once in 5 years. You are charged 2% interest compounded monthly.
1 answer:
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Answer:
x= -11/4 is a maximum.
Step-by-step explanation:
Remember that a function has its critical points where the derivative equal zero. Therefore we need to compute the derivative of this function and find the points where the derivative is zero. Using the chain rule and the product rule we get that
And then we get that if then
. So it has a critical point at
.
Now, if the second derivative evaluated at that point is less than 0 then the point is a maximum and if is greater than zero the point is a minimum.
Since
x= -11/4 is a maximum.