We computed the present value of a continuous flow of money. Suppose that instead of a continuous

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We computed the present value of a continuous flow of money. Suppose that instead of a continuous flow, an amount C is deposited each year, and the annual interest rate is r. Then the present value of the cash flow over n years is

(a) Show that the present value can be simplified to

(b) Show that the present value, taken over an infinite amount of time, is given by P = C/r.

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Calculus With Applications

ISBN: 9780135871348

12th Edition

Authors: Margaret L. Lial

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Question Posted: Jan 24, 2023 08:53 AM

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We computed the present value of a continuous flow of money. Suppose that instead of a continuous

Question:

P = C(1 + r)−¹ + C(1 + r)−² + C(1 + r)−³ + + C(1 + r)". ...

Step by Step Answer:

a Consider the finite sequence This is a finite geometric sequence ...View the full answer

Calculus With Applications

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