1. This problem relates to Future Value, and Future income streams. Assume continuous compounding of interest. (a) Find the present value of a single future payment of FV = $50,000 to be made 20 years from now, assuming an interest rate of 5 percent. (b) Suppose you want a future income stream (annual payments) of FV (t)= 500t for 20 years. Find the present value of this income stream, assuming an interest rate of 5 percent.

1. This problem relates to Future Value, and Future income streams. Assume continuous compounding of interest. (a) Find the present value of a single future payment of FV = $50,000 to be made 20 years from now, assuming an interest rate of 5 percent. (b) Suppose you want a future income stream (annual payments) of FV (t)= 500t for 20 years. Find the present value of this income stream, assuming an interest rate of 5 percent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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