Mr. Mudd gives each of his children $2000 to invest as part of a friendly family competition. The competition will last 10 years. The rules of the competition are simple. Each child can split up his or her $2000 into as many separate investments as they please. The children are encouraged to do their research on types of investments. The initial investments made may not be changed at any point during the 10 years; no money may be added and no money may be moved. Whichever child has made the most money after 10 years will be awarded an additional $10,000.
The table shows the investment made by each of Mr. Mudd’s children, and what happened to their investment over the decade long friendly competition.
| Child | Performance of investments over the course of the competition |
|---|---|
| Albert | $1000 earned 1.2% annual interest compounded monthly $500 lost 2% over the course of the 10 years $500 grew compounded continuously at rate of 0.8% annually |
| Marie | $1500 earned 1.4% annual interest compounded quarterly $500 gained 4% over the course of 10 years |
| Hans | $2000 grew compounded continuously at rate of 0.9% annually |
| Max | $1000 decreased in value exponentially at a rate of 0.5% annually $1000 earned 1.8% annual interest compounded biannually (twice a year) |
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