An annuity pays a continuous income stream of M dollars per year into an account that pays

Question:

An annuity pays a continuous income stream of M dollars per year into an account that pays interest at an annual rate r compounded continuously for a term of T years.

a. Show that the future value of the annuity is

b. Show that the present value of the annuity is

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Calculus For Business, Economics And The Social And Life Sciences

ISBN: 9780073532387

11th Brief Edition

Authors: Laurence Hoffmann, Gerald Bradley, David Sobecki, Michael Price

See More Books

Question Posted: Jun 24, 2023 04:40 AM

See More Questions

KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
An investor makes regular deposits totaling D dollars each year into an account that earns interest at the annual rate r compounded continuously. a. Explain why the account grows at the rate where...
A 58-year-old couple are considering opening a business of their own. They will either purchase an established Gift and Card Shoppe or open a new Wine Boutique. The Gift Shoppe has a continuous...
A voltage V is applied to a dc electric motor. The armature winding resistance is equal to R. At what value of current flowing through the winding will the useful power of the motor be the highest?...
Everything else held constant, if a firm announces that it will double the length of time between its ex-dividend date and its payment date, what should be the effect on the stock price?
Refer to RadioShacks financial statements in Appendix A to compute its equity ratio as of December 31, 2008 and 2007.
What are the advantages and disadvantages of structured, unstructured, and semi-structured interviews?
Warren Buffett, arguably the most famous investor in the United States, is the CEO of Berkshire Hathaway (BRK), a company that has enjoyed great success in terms of its stock price. Below are the...
Suppose you have savings of $5,820 in a bank account that pays monthly compound interest of 1.4%. You expect to deposit $243 per month for 49 months from your account, with the first deposit starting...
Lucia Company has set the following stendard cost per unit for direct materials and direct labor Direct naterials (15 pounds @ $5 per pound) Direct labor (3 hours $16 per hour) $ 75 During May the...
In Exercises 47 through 50, sketch the Lorenz curve y = L(x) and find the corresponding Gini index. L(x) = x 1.2
In Exercises 43 through 46, solve the given separable initial value problem. dy dx y = 1 when x = 1
The General Social Survey (GSS) asked a random sample of adults their opinion about whether astrology is very scientific, sort of scientific, or not at all scientific. Here is a two-way table of...
Listed below are the lead concentrations (in ug/g) measured in different Ayurveda medicines. Ayurveda is a traditional medical system commonly used in India. The lead concentrations listed here are...
The assignment states to use a movie and talk about 2 scenes where physics ideas are used. The rubric is shown and 6 big ideas that can be talked about are also attached. Background Information...
A series of computer and backup system failures caused the loss of most of the company records at Stotter, Incorporated. Information technology consultants for the company could recover only a few...
Future value of an annuity Using the values below, answer the questions that follow. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Deposit period...
Mercury, Incorporated, produces cell phones at its plant in Texas. In recent years, the company's market share has been eroded by stiff competition from overseas. Price and product quality are the...
In its 2006 financial statements, Cris Co. reported interest expense of $85,000 in its income statement and cash paid for interest of $68,000 in its cash flow statement. There was no prepaid interest...
Distinguish between the work performed by public accountants and the work performed by accountants in commerce and industry and in not-for-profit organisations.
It has been stated that the normal distribution is really a family of distributions. Explain.
In the normal distribution, the probability that x will exceed ( + 2) is the same as the probability that x will be less than ( - 2). What characteristic of the normal distribution does this reflect?
Sketch two different normal distributions along a single x axis so that both of the following conditions are satisfied: (a) a = b and b a > b .
Suppose you bought a bon with an annual coupon rate of 6.5 percent one year ago for $1,032. The bond sells for $1,020 today. a. Assuming a $1,000 face value, what was your total dollar return on this...
During the year 2021, William has a job as an accountant, he earns a salary of $100,000. He has done some cleaning services work on his own (self-employed), where he earned a net income of $50,000....
Fixed cost per unit is $7 when 25,000 units are produced and $5 when 35,000 units are produced. What is the total fixed cost when 30,000 units are produced? Group of answer choices $150,000....

An annuity pays a continuous income stream of M dollars per year into an account that pays

Question:

FV = M r -(eT - 1)

Step by Step Answer:

a b FV ftedt MeT...View the full answer

Calculus For Business, Economics And The Social And Life Sciences

Students also viewed these Mathematics questions