A movie stuntman receives an annual salary of $110,000, but becomes a quadriplegic after jumping from a cliff into water that is too shallow. He can never work again as a stuntman. Through a legal settlement with his insurance company, he is granted a continuous income stream of $110,000 per year for 20 years. The stuntman invests the money at 7.8%, compounded continuously. a) Find the accumulated future value of the continuous income stream. ea b) Thinking that he might not live 20 years, the stuntman negotiates a flat sum payment from the insurance company, which is the accumulated present value of the continuous income stream. What is that amount? a) The accumulated future value is (Round to the nearest ten dollars as needed.) b) The accumulated present value is $. (Round to the nearest ten dollars as needed.)

A movie stuntman receives an annual salary of $110,000, but becomes a quadriplegic after jumping from a cliff into water that is too shallow. He can never work again as a stuntman. Through a legal settlement with his insurance company, he is granted a continuous income stream of $110,000 per year for 20 years. The stuntman invests the money at 7.8%, compounded continuously. a) Find the accumulated future value of the continuous income stream. ea b) Thinking that he might not live 20 years, the stuntman negotiates a flat sum payment from the insurance company, which is the accumulated present value of the continuous income stream. What is that amount? a) The accumulated future value is (Round to the nearest ten dollars as needed.) b) The accumulated present value is $. (Round to the nearest ten dollars as needed.)

College Algebra

10th Edition

ISBN:9781337282291

Author:Ron Larson

Publisher:Ron Larson

Chapter8: Sequences, Series,and Probability

Section8.3: Geometric Sequences And Series

Problem 8ECP: An investor deposits $70 on the first day of each month in an account that pays 2 interest,...

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