unt pays interest at a continuously compounded rate of .05 per year. Continuous deposits are made to the account at a rate of 1000 per year for 6 years, and then at a rate of 2000 per year for the next 4 years. What is the account balance at the end of 10 years?

unt pays interest at a continuously compounded rate of .05 per year. Continuous deposits are made to the account at a rate of 1000 per year for 6 years, and then at a rate of 2000 per year for the next 4 years. What is the account balance at the end of 10 years?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

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Question

An account pays interest at a continuously compounded rate of .05 per year. Continuous deposits are made to the account at a rate of 1000 per year for 6 years, and then at a rate of 2000 per year for the next 4 years. What is the account balance at the end of 10 years?

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Future value of compounding continuously can be calculated using exponential form of interest rate.

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