If money is flowing continuously at a constant rate of $2, 000 per year over 5...

If money is flowing continuously at a constant rate of $2, 000 per year over 5 years at 6% interest compounded continuously, find the following.

1. The total money flow over the 5-year period.

2. The accumulated amount of money flow, compounded continuously, at time T = 5.

3.The total interest earned.

4.The present value of the amount of money with interest.

Solutions

Expert Solution

milcah answered 1 year ago

Next > < Previous

Related Solutions

Suppose V is constant, M is growing 5% per year, Y is growing 2% per year,...

Suppose V is constant, M is growing 5% per year, Y is growing 2% per year, and r = 4. a. Solve for i. b. If the Central bank increases the money growth rate by 2 percentage points per year, find Δi. c. Suppose the growth rate of Y falls to 1% per year. - What will happen to π ? - What must the Fed do if it wishes to π constant?

If inflation grows continuously at a rate of 9 % per year, how long will it...

If inflation grows continuously at a rate of 9 % per year, how long will it take for $ 2 to lose half its value? It will take approximately nothing years for $ 2 to lose half its value. (Do not round until the final answer. Then round to the nearest tenth as needed.)

Assume that the velocity of money is constant. If GDP is growing at 1% per year,...

Assume that the velocity of money is constant. If GDP is growing at 1% per year, and the Fed wants to keep inflation at 3%, the Fed should increase the money supply at a rate of ______ percent. (Your answer should be a number.)

Bank Monash quotes the interest rate on loans as 5% per annum continuously compounded. The interest...

Bank Monash quotes the interest rate on loans as 5% per annum continuously compounded. The interest is actually paid monthly on a $3752 loan. What is the interest payment (in $) of this loan per month? p.s That's the whole problem. It didn't provide any info about the duration.

Suppose the spot $/Yen exchange rate is 0.008, the 1-year continuously compounded dollardenominated rate is 5%...

Suppose the spot $/Yen exchange rate is 0.008, the 1-year continuously compounded dollardenominated rate is 5% and the 1-year continuously compounded yen-denominated rate is 1%. Suppose the 1-year forward exchange rate is 0.0084. Explain precisely the transactions you could use (being careful about currency of denomination) to make money with zero initial investment and no risk. What is such a strategy being referred to in the markets?

The rate of inflation over the last two years has averaged 2% per year. At the...

The rate of inflation over the last two years has averaged 2% per year. At the same time, John feels like he is able to purchase fewer goods and services with his annual salary. Therefore:\ Both John’s nominal and real salaries must have declined John must not have received any pay raise John’s nominal salary must have declined John’s real salary must have declined 29. Under which of the following circumstances is inflation most costly to an individual? Group of...

Kilsheimer Company just paid a dividend of $5 per share. Dividends are expected to grow at a constant rate of 7% per year.

Kilsheimer Company just paid a dividend of $5 per share. Dividends are expected to grow at a constant rate of 7% per year. What is the value of the stock to you if the required return is 16%? If the stock is trading for $45 in the market, would you want to buy this stock?

A six-year bond, with a Face Value of $1000 has yield rate of 5% compounded continuously,...

A six-year bond, with a Face Value of $1000 has yield rate of 5% compounded continuously, and coupon rate of 6% compounded semi-annually, paid every half-year. You are required to: a) compute the price of bond b) compute the the duration of bond c) compute the convexity of bond. d) Use duration to estimate the effect of a 1% increase in the yield on the price of bond. e) Use convexity to estimate the eect of a 1% increase in...

Water is flowing at the rate of 5 m3 /min into a tank in the form...

Water is flowing at the rate of 5 m3 /min into a tank in the form of a cone of altitude 20 m and a base radius of 10 m, with its vertex in the downward direction. a) How fast is the water level rising when the water is 8m deep? b) If the tank has a leak at the bottom and the water level is rising at 0.084 m/sec when the water is 8 m deep, how fast is...

Kabo saved P10, 000 with FNB for 5 years earning an interest rate of 10% per...

Kabo saved P10, 000 with FNB for 5 years earning an interest rate of 10% per annum. Calculate the amount of money Kabo will receive at the end of 5 years: If simple interest was used? If compound interest was used?

Subjects