Question: Suppose that a continuous income stream has an annual rate of flow at time t given by f (t) =A, where A is a constant.

Suppose that a continuous income stream has an annual rate of flow at time t given by f (t) =A, where A is a constant. If the interest rate is r (as a decimal, r ˃ 0), compounded continuously, show that the capital value of the stream is A/ r.

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