contestada

Someone invests a constant stream of $450 per year at a continuously compounding interest rate of 5%. What is the present value of this continuous stream if it continues for 50 years? Round your answer to the nearest dollar, and do not include the dollar sign.

Respuesta :

TomShelby

Answer:

The present value of the annuity will be 8,215

Explanation:

This will be the case of an annuity.

There is an annuity of 450 dollars, at a 5% rate for 50 years.

[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]

c= 450

rate = 0.05

time = 50

[tex]450 \times \frac{1-(1+0.05)^{-50} }{0.05} = PV\\[/tex]

PV =  $8,215.1665

rounding to nearest dollar = $8,215

Otras preguntas