Problem

The continuously compounded interest rate is 12%.a. You invest $1,000 at this rate. What i...

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. What is the PV of a continuous stream of cash flows, amounting to $2,000 per year, starting immediately and continuing for 15 years?

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Solutions For Problems in Chapter 2