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In: Statistics and Probability

Kaitlin wants to buy a bond that will mature to $5000 in six years. How much...

Kaitlin wants to buy a bond that will mature to $5000 in six years. How much should she pay for the bond now if it earns interest at a rate of 2.5% per year, compounded continuously?

Do not round any intermediate computations, and round your answer to the nearest cent.

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Expert Solution

Answer:-

Given that:-

Statistics and Probability

Kaitlin wants to buy a bond that will mature to $5000 in six years.

How much should she pay for the bond now if it earns interest at a rate of 2.5% per year, compounded continuously?

Amount = $5000

Time =6 years

Rate = 2.5%

Principal=?

Compounded Interest = Amount - principal

Amount

  

  

she pay for the bond now $ 4311.48

orchestra answered 2 years ago
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