Question: Question 5. (20 points) a. (10 points, no partial) Derive continuously compounded effective interest rate by using the formula for discrete compounding. b. (10 points)

Question 5. (20 points) a. (10 points, no partial) Derive continuously compounded effective interest rate by using the formula

for discrete compounding.

b. (10 points) Equal quarterly withdrawals of $500 extends over a period of 5 years. What is the present worth of this payment series at 6% interest compounded continuously?

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