Bertrand is a worker in Canada with a continuous income stream at the rate of 650e dollars per year. 1. What will be the present value of Bertrand's income stream if the income stream terminates after exactly 3 years and the discount rate is 7.5%. 2. Find the discrete-compounding interest rate that is equivalent to the continuous-compounding nominal interest rate of 7.5% per annum, com- pounded quarterly.

Bertrand is a worker in Canada with a continuous income stream at the rate of 650e dollars per year. 1. What will be the present value of Bertrand's income stream if the income stream terminates after exactly 3 years and the discount rate is 7.5%. 2. Find the discrete-compounding interest rate that is equivalent to the continuous-compounding nominal interest rate of 7.5% per annum, com- pounded quarterly.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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