Request: Please correct only the wrong answers here:

In lecture, Professor Gruber explained discrete compounding interest. Interest can also be compounded continuously. Here we explain the difference. Professor Gruber calculated future value as FV = P(1 -l t, where P is the principal, 'r' is the interest rate, and t is the term of the contract [often in years). This formula can be generalized to FV : P(1 l ns)\How many years should you hold the case of wine before selling it? {Consider only integer years. Suppose that interest is compounded discretely [annually], not continuously.] - 5 How much money will you receive for the case of wine at the time offrs sale? 133.92 x 138.92 What is the net present value of that investment? _-7 229.04 I 229.04 Sme" You have used 1 of 2 attempts save Let's consider the problem that is the continuous-time analog to the above discrete-time problem. This is perhaps a more realistic problem. Suppose interest is compounded continuously instead of discretely. You may again choose how many years to hold the case of wine before selling it but now suppose you can sell at any time, not just at the integer years. How many years should you hold the case of wine before selling it? 5, x 2 How much money will you receive for the case of wine at the time ofirs sale? _ .. 141 What is the net present value of that investment? 100 You have used 1 of 2 attempts save