1. (See image), which assumes continuous compounding, says that the Future value (F) of an amount (P) invested today at an annual rate (r), expressed as a decimal for the time (t), in years is given by the function. Thus if you invested $100 now at the annual rate of 5 1/2% for 6 years and 3 months you would get back (at the end of the time), F = $100e^(0.055)^(6.25) = $100e^(0.3438) = $100(1.4102) = $141.02. Suppose you put $2000 in a savings account when your son was born for 18 years and 6 months to help pay for his college education. If you can earn 3% annually on it, what should you have in his education savings account in 18 years and 6 months? b1. FPe, which assumes continuous compounding, says that the Future value (F) of anamount (P) invested today at an annual rate (), expressed as a decimal for the time (), in years isgiven by the function. Thus if you invested $100 now at the annual rate of 5 1/2% for 6 years and 3months you would get back (at the end of the time), FS1005 $1000055y625) $100$100(1.4102)S141.02. Suppose you put $2000 in a savings account when your son was born for 18 years and6 months to help pay for his college education. If you can earn 3% annually on it, what shouldyou have in his education savings account in 18 years and 6 months?

Compute the amount in savings account when $2,000 is invested in savings account at 3% annual return…

Answered: b1. F Pe, which assumes continuous…

Principles of Accounting Volume 2

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Author:OpenStax

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Chapter11: Capital Budgeting Decisions

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1. (See image), which assumes continuous compounding, says that the Future value (F) of an amount (P) invested today at an annual rate (r), expressed as a decimal for the time (t), in years is given by the function. Thus if you invested $100 now at the annual rate of 5 1/2% for 6 years and 3 months you would get back (at the end of the time), F = $100e^(0.055)^(6.25) = $100e^(0.3438) = $100(1.4102) = $141.02. Suppose you put $2000 in a savings account when your son was born for 18 years and 6 months to help pay for his college education. If you can earn 3% annually on it, what should you have in his education savings account in 18 years and 6 months?

b1. F
Pe, which assumes continuous compounding, says that the Future value (F) of an
amount (P) invested today at an annual rate (), expressed as a decimal for the time (), in years is
given by the function. Thus if you invested $100 now at the annual rate of 5 1/2% for 6 years and 3
months you would get back (at the end of the time), FS1005 $100
0055y625) $100$100(1.4102)
S141.02. Suppose you put $2000 in a savings account when your son was born for 18 years and
6 months to help pay for his college education. If you can earn 3% annually on it, what should
you have in his education savings account in 18 years and 6 months?

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