Homework Answers
Interest is compounded continuosly means each period interest is added to principal and interest is not only on principal but on interest portion also.
Present Value with Continuous Compounding = Future Value / e^(rate*time)
= 14500/e^(.05/12 * 18)
= 14500/e^0.075
= 14500/1.07788415088
= 13452.2805518
= $13,452.28
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