a. Compute the future value of $1,900 continuously compounded for 7 years at an

Question

a. Compute the future value of $1,900 continuously compounded for 7 years at an annual percentage rate of 11 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value   

b. Compute the future value of $1,900 continuously compounded for 5 years at an annual percentage rate of 12 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value   

c. Compute the future value of $1,900 continuously compounded for 11 years at an annual percentage rate of 8 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value   

d. Compute the future value of $1,900 continuously compounded for 9 years at an annual percentage rate of 6 percent. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Future value   

Explanation / Answer

We use the formula:

A=P(e)^rt

where A=future value

P=present value

e=2.71828

r=rate of interest

t=time period

1.

A=1900(2.71828)^(0.11*7)=$4103.55

2.

A=1900(2.71828)^(0.12*5)=$3462.02

3.

A=1900(2.71828)^(0.08*11)=$4580.71

4.

A=1900(2.71828)^(0.09*6)=$3260.41

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