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Problem 4 Company ABC has an instantaneous investment stream, S(n), over 2 years that can be represented as a continuous first-degree polynomial function as given
Problem 4 Company ABC has an instantaneous investment stream, S(n), over 2 years that can be represented as a continuous first-degree polynomial function as given in the below figure for Year 1 and Year 2. Part A: If a continuously compounded interest is applied to the instantaneous cash flow investment stream, determine the future worth of the investment at the end of Year 6. Investment Stream $1,000 /year Line = S(n) Investment Stream, $/year Time, years Part B: If the investment stream was abruptly discontinued at the end of Year 1, how much accumulated interest is lost from the future value after 6 years compared to Part 1? (Hint for investments: I =F-T). For both Part 1 and Part 2 of Problem 4, the nominal interest rate is 15%/year
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