A business is planning to purchase a piece of equipment that will produce a continuous stream of income for 8 years with rate of flow f(t) = 9,000. If the continuous income stream earns 6.9%,compounded continuously, what single deposit into an account earning the same interest rate will produce the same future value as the continuous income stream? (This deposit is called thepresent value of the continuous income stream.)What is the future value of the investment?(Round to the nearest dollar as needed.)

### Present Value of a Continuous Income StreamGiven:- Rate of flow f(t) = 9000 (constant)-…

Answered: A business is planning to purchase a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

What is the present worth difference between an investment of $15,000 per year for 35 years and an investment of $15,000 per year forever at an interest rate of 13% per year? The difference is determined to be $
An asset costs $7 million today. It can generate a $2 million income every 6 years, starting from today. This asset will last 60 years, generating 11 cash flows in total. What is the implied annual rate of return?.
ou can assume that all payments are made at the beginning of the period and use "1" for the "type" argument in the formula. A. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded annually? B B. Suppose you invest $ 11,400 today. What is the future value of the investment in 29 years, if interest at 7% is compounded quarterly? 4 5 6 27 28 29 C. Suppose you invest St $ 570 monthly. What is the future value of the investment in 29 years, if interest at 5% is compounded monthly? Question 1 Question 2 + Ready Accessibility: Investigate MAR 17 A W +
How much will $200,000 deposited in an investment account earning an annual interest rate of 8½% be worth one year from today?
Suppose that you are planning to buy a boat in in 28 years [cell B3] for $100,000 [cell B2], and you deposit into your account the amount of $26,000 CAD [cell B1]. (a) What average annually compounding rate of return (as a percentage, correct to 2 decimals) should you earn so you can accumulate the lump sum needed to achieve your goal [cell B5]? Use the RATE function.(Note: You might have to modify the format of cell B5 so that it shows 2 decimals.) (b) What is the correct formula (using 18 characters or less) that should be placed in cell B5?Note: There are to be NO numbers in the function call (apart from a 0 if appropriate), only cell references, or negative cell references where appropriate. In excel pls.
When an initial amount of P dollars is invested at r% annual interest compounded n times per year, the value of the account (4) after years is given by the equation nt A=P(1 + =)** n Write an equation that represents the value in an account that starts out with an initial investment of $5000 and pays 10% interest compound monthly. Then use that equation to fill the table and use the table to graph the equation. Years (1) Value (4) 0 5 10 15 20 oo → KI
Today (n=0), a company invests $1,000 and expects that investment to grow 10% each period for the next six periods (n=6). What is the investment's expected future value?
If money is invested at 6% per year, after approximately how many years will the interest earned be equal to the original investment?
Suppose you save $2,800 ayear for 43 years into an investment account that earns 8.5% return, how much will you have at the end of the periods? Formula? Excel Function?
An investment will pay $500 two years from now, $841 four years from now, and $1,166 five years from now. You are going to reinvest these cash flows at a rate of 14.53 percent per year. What is the future value of this investment at the end of year five?
An investment makes annual payments. The first payment of $245 is due in one year at i = 1. The payments grow at a rate of 14.0% annually until t =14. Payments are then stable until t =32. Afterwards, payments grow at a rate of 2.0% annually (the payment at i =33 is 2.0% bigger that the payment at 1 =32) and are paid into perpetuity. a) What is the size of the cash flow at / =15? 2$ |(Give answer to 2 decimal places.) b) What is the size of the cash flow at t =33? |(Give answer to 2 decimal places.) c) What is the present value of the investment if the discount rate is 16.0%? | (Give answer to 2 decimal places.)
Assuming an annual rate of return of 9.5% and depositing $3,000 at the end of every 6 months into your investment account, how much will you have after 30 years?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS