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continuous compounding

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A small business expects an income stream of $5000 per year for a four-year period.

a) Find the present value of the business if the annual interest rate compounded continuously is:
(1) 3%
(2) 10%

b) in each case, find the value of the business at the end of the four-year period.

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The solution calculates Present Value using continuous compounding.

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