shenny

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18 years, 2 days

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I'm not sure how to do it, because normally the question provide the equation of V(t).  Am i correct if i js use d normal equation of present value?   Pt = P0 ert   and  change it to   P0 = Pt e-rt  and assume V(t)= Pt e-100rt         Then, differential the V(t) equation and assume dV(t)/dt = 0 to have maximum..  My working :  

ln V(t) = ln Pt + ln e-100rt

            = ln Pt + (-100rt) ln e    Then,    

1/ V(t)  dV(t)/dt = 0 - 100r

      dV(t)/dt = V(t) [ -100r]

let dV(t)/dt = 0,

V(t) [-100r] = 0  ,   V(t) not equal to 0

-100r = 0

       r = 0   (I'm stuck here, i couldn't do the second order condition. )

I think i do somethings wrong, pls tell me where goes wrong.

Thank you very much..

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