Your math professor has decided to retire and return to his jetsetting life style. He wishes to establish a fund from which he can withdraw $5,000 per month for the next 30 years. If the fund earns 6% per year compounded continuously, how much money does he need now to establish the fund? Exact value = dollars Rounded to the nearest cent = dollars7 = 6% compounding continuously 7 = 0. 06 8 1 = 060 6 x 3 0 = 1.8 1 = 30 year monthly installment = $5000 Total money he wants = 5000* 12X30 = $ 1,800, 000 Now using formula 18 00,000 = Po (ex - 1 ) P. = 1, 800, 00 0 1, 800,000 ( ext - 1 ) ( el.8 - 1 ) Exact value - 1, 800, 000 el. - 1 Po 1,800, 000 = 35 6, 460. 5271 5.04967 Po = $ 356, 460. 53 Nearest cent