Bertrand is a worker in Canada with a continuous income stream at the rate of 650e dollars per year. 1. What will be the present value of Bertrand's income stream if the income stream terminates after exactly 3 years and the discount rate is 7.5%. 2. Find the discrete-compounding interest rate that is equivalent to the continuous-compounding nominal interest rate of 7.5% per annum, com- pounded quarterly.

Bertrand is a worker in Canada with a continuous income stream at the rate of 650e dollars per year. 1. What will be the present value of Bertrand's income stream if the income stream terminates after exactly 3 years and the discount rate is 7.5%. 2. Find the discrete-compounding interest rate that is equivalent to the continuous-compounding nominal interest rate of 7.5% per annum, com- pounded quarterly.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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