Michael receives from his great aunt three stores. He estimates that these will bring him money at a rate of f(t) = 60e0.01t thousand dollars per year t years from now. He invests all of this income at a continuously compounded interest rate of 4.5 percent per year. (a) How much money will Michael have in 30 years? 2099152.85 dollars
Michael receives from his great aunt three stores. He estimates that these will bring him money at a rate of f(t) = 60e0.01t thousand dollars per year t years from now. He invests all of this income at a continuously compounded interest rate of 4.5 percent per year. (a) How much money will Michael have in 30 years? 2099152.85 dollars
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
1
![Michael receives from his great aunt three stores. He estimates that these will
bring him money at a rate of
f(t) = 60e0.01t
thousand dollars per year t years from now. He invests all of this income at a
continuously compounded interest rate of 4.5 percent per year.
(a) How much money will Michael have in 30 years?
2099152.85
dollars
(b) What is the present value of the income of the first 30 years?
1114392.43
dollars
[Remember to keep two decimals when talking about money.]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdfdee859-7cf9-4723-b37c-29be04b7641b%2F88b44c33-f157-4295-9412-16d775954fea%2Fog56cpk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Michael receives from his great aunt three stores. He estimates that these will
bring him money at a rate of
f(t) = 60e0.01t
thousand dollars per year t years from now. He invests all of this income at a
continuously compounded interest rate of 4.5 percent per year.
(a) How much money will Michael have in 30 years?
2099152.85
dollars
(b) What is the present value of the income of the first 30 years?
1114392.43
dollars
[Remember to keep two decimals when talking about money.]
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