Question: Continuously compounded discount rate Date 1 234569 7 Present value Continuously compounded discount rate Date today Date 1-Jan-06 31-Jan-06 31-Jan-07 17-Jul-07 31-Dec-07 14-Mar-08 11-Nov-08

Continuously compounded discount rate Date 1 234569 7 Present value Continuously compounded

Continuously compounded discount rate Date 1 234569 7 Present value Continuously compounded discount rate Date today Date 1-Jan-06 31-Jan-06 31-Jan-07 17-Jul-07 31-Dec-07 14-Mar-08 11-Nov-08 13-Mar-09 15% Present Cash flow value 15,000 22,000 14,750 3,222 6,333 18,000 280,000 [Compute the continuously compounded present value of the following set of cash flows, using a discount rate of 15%. 15% 1-Jan-06 Cash flow Time (years) from today Present value 15,000 22,000 14,750 3,222 6,333 18,000 280,000 Present value Hint: use 365-day per year convention Exercise 1 Exercise 2 Exercise 3 Exercise 4 Exercise 5 Exercise 6 Exercise 7 Exercise 8 Exercise 9 Exercise 10

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