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10. Continuous compounding The continuously compounded interest rate is 12%. a. You invest $1,000 at this rate. What is the investment worth after five years? b. What is the PV of $5 million to be received in eight years? c. What is the PV of a continuous stream of cash flows, amounting to $2,000 per year, starting immediately and continuing for 15 years? 11. Compounding intervals You are quoted an interest rate of 6% on an investment of $10 million. What is the value of your investment after four years if interest is compounded: a. Annually? b. Monthly? or c. Continuously