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MBA,PHD, Juris Doctor
Strayer,Devery,Harvard University
Mar-1995 - Mar-2002
Manager Planning
WalMart
Mar-2001 - Feb-2009
wu 5. A certain small country has $10 billion in paper currency in circulation, and each day $50 million comes into the country’s banks. The government decides to introduce new currency by having the banks replace old bills with new ones whenever old currency comes into the banks. Since both old bills and new bills will come into the banks while the new currency is gradually introduced, we will need to solve a differential equation to track the amount of new currency in circulation at a given time. Let m(t) denote the amount of new currency, in billions of $, in circulation after t days. Note 1:(0) = 0. The amount of old money in circulation at time t is 10 — 1:(t), so the fraction of old money in circulation at time t is 10—1—36). Thus, the amount of old currency coming into the banks each day (and being turned into new currency!) is W - 0.05 billions of dollars. 10 — if —$() -0.05, which simplifies to 0.005(10 — We’ve shown that new currency is introduced at the rate 10 This justifies that m(t) satisfies the differential equation d1: — = 0.005 10 — . dt ( m) (a) (4 points) Solve the differential equation to find m(t). (b) (2 points) At what time it will new bills make up 90% of the currency in circulation?
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