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?© BrainMass Inc. brainmass.com June 3, 2020, 6:45 pm ad1c9bdddf
Please see the excel sheet attached with formulas and solution steps, including final answers.