The continuously compounded interest rate is 8%. a. You invest $1,030 at this rate. What is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The continuously compounded interest rate is 8%. a. You invest $1,030 at this rate. What is the investment worth after eight years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the PV of $5.3 million to be received in eleven years? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. Enter your answer in dollars, not millions of dollars.) c. What is the PV of a continuous stream of cash flows, amounting to $2,030 per year, starting immediately and continuing for 18 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) a. Future value b. Present value c. Present value The continuously compounded interest rate is 8%. a. You invest $1,030 at this rate. What is the investment worth after eight years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the PV of $5.3 million to be received in eleven years? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount. Enter your answer in dollars, not millions of dollars.) c. What is the PV of a continuous stream of cash flows, amounting to $2,030 per year, starting immediately and continuing for 18 years? (Do not round intermediate calculations. Round your answer to 2 decimal places.) a. Future value b. Present value c. Present value
Expert Answer:
Answer rating: 100% (QA)
a To calculate the future value of an investment we can use the formula for continuous compounding F... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these economics questions
-
The treasurer of Kelly Bottling Company (a corporation) currently has $200,000 invested in preferred stock yielding 10 percent. He appreciates the tax advantages of preferred stock and is considering...
-
The continuously compounded interest rate is 12%. a. You invest $1,000 at this rate. What is the investment worth after five years? b. What is the PV of $5 million to be received in eight years? c....
-
For each problem, show your work steps. A correct answer with no work shown gets half credit (which means you fail the assignment). An incorrect answer with no work receives 0 credit. With time value...
-
Assume you are offered a lease for a car with $227 monthly payments for 36 months after a $2,540 up front (down) payment. The alternative is that you can buy the car for $31,000 and make a $3,200...
-
Carter Enterprises can issue floating-rate debt at LIBOR +2 percent or fixed-rate debt at 10.00 percent. Brence Manufacturing can issue floating-rate debt at LIBOR +3.1 percent or fixed-rate debt at...
-
Two moles of an ideal gas at T = 400 K expand quasi-statically and isothermally from an initial volume of 40 L to a final volume of 80 L. (a) What is the entropy change of the gas? (b) What is the...
-
Locate an article that discusses organization of trial materials. How can these materials be organized electronically?
-
1. What characteristics did Salvatore Parasuco possess that made him successful as an entrepreneur? 2. The visibility of Parasuco jeans is higher in other countries than in Canada. Why might this be...
-
what extent do Blue Ocean Strategy principles enable firms to transcend industry boundaries, redefine market spaces, and unlock uncontested market share by creating innovative value propositions that...
-
As a financial analyst at Glencolin International (GI) you have been asked to evaluate two capital investment alternatives submitted by the production department of the firm. Before beginning your...
-
One considers a steady flow down a wide plane, which is inclined to the horizontal by an angle of , under the action of gravitational force as shown in Figure 2. The depth of the fluids normal to the...
-
Describe the supply chain of your company. What role does your company play in the supply chain?
-
Give as many reasons as you can why we believe that indifference curves are convex and explain.
-
Suppose that consumers in Bangladesh pay twice as much per unit for mangoes as they pay for bananas, whereas consumers in Indonesia pay half as much for mangoes as they pay for bananas. Assuming that...
-
The Wall Street Journal, a newspaper based in the United States, publishes an index of Starbucks coffee prices in various cities around the world. Would people find this index to be as useful as the...
-
In the long run, a firm can usually substitute one input for another while continuing to produce the same level of output. If such a firm produces a given level of output using the same amount of...
-
The following table, shows people's ages cross classified against their attitude toward existing daylight saving rules in Australia: Under 25 years 25 to 50 years Over 50 years Agree 27 35 29...
-
The cost curve for the city water supply is C(Q) = 16 + 1/4 Q2, where Q is the amount of water supplied and C(Q) is the cost of providing Q acre-feet of water. (An acre-foot is the amount of water...
-
Marty is a sales consultant. Marty incurs the following expenses related to entertainment of his clients in 2012: Dues to a country club......................................................$4,500...
-
Larry and Lisa Williams, both 33 years old, have been married for 9 years. They live at 638 Arctic Way, Fairbanks, AK 99701. Lisa's Social Security number is 445- 81-1423 and Larry's is 798-09-8526....
-
Jerry made the following contributions during 2012: His synagogue (by check).....................................................$680 The Democratic Party (by check)...
-
For the idealized class-B output stage in Figure 8.18 in the text, show that the maximum theoretical conversion efficiency for a symmetrical squarewave input signal is 100 percent. <00 B V+ A Figure...
-
Consider an idealized class-B output stage shown in Figure P8.22. The output stage is to deliver \(50 \mathrm{~W}\) of average power to a \(24 \Omega\) load for a symmetrical input sine wave. Assume...
-
Consider an idealized class-B output stage shown in Figure P8.22. (The effective turn-on voltages of devices A and B are zero, and the effective "saturation" voltages of \(v_{A}\) and \(v_{B}\) are...
Study smarter with the SolutionInn App