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    calculations of interest rates and future value.

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    How much will $100 grow to if invested at a continuously compounded interest rate of 10% for 8 years? What if it is invested for 10 years at 8%.

    A local bank will pay you $100 a year for your lifetime if you deposit $2500 in the bank today. If you plan to live forever, what interest rate is the bank paying?

    A property will provide $10,000 a year forever. If its value is $125,000, what must be the discount rate?

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    Solution Summary

    Please see the excel sheet attached with formulas and solution steps, including final answers.