An investment will generate income continuously at the constant rate of Q dollars per year in perpetuity.

Question:

An investment will generate income continuously at the constant rate of Q dollars per year in perpetuity. Assuming a fixed annual interest rate r compounded continuously, use an improper integral to show that the present value of the investment is Q/r dollars.

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

Question Posted: