Purchase Solution

Continuous Income Stream

Not what you're looking for?

Ask Custom Question

Starting at age 25, you deposit $2000 a year into an IRA account for retirement. Treat the yearly deposits into the account as a continuous income stream. If money in the account earns 6%, compounded continuously, how much will be in the account 40 years later, when you retire at age 65? How much of the final amount is interest? What is the value of the IRA when you turn 65?

Purchase this Solution

Solution Summary

This solution contains a step-by-step solution is provided in a pdf file with full computations to determine the final amount and the value of the IRA.

Solution Preview

This question is asking us to find the Future Value of a continuous income stream, compounded continuously. The formula is as follows: see the attached file. ...

Solution provided by:
Education
  • MSc, California State Polytechnic University, Pomona
  • MBA, University of California, Riverside
  • BSc, California State Polytechnic University, Pomona
  • BSc, California State Polytechnic University, Pomona
Recent Feedback
  • "Excellent work. Well explained."
  • "Can you kindly take a look at 647530 and 647531. Thanks"
  • "Thank you so very much. This is very well done and presented. I certainly appreciate your hard work. I am a novice at statistics and it is nice to know there are those out there who really do understand. Thanks again for an excellent posting. SPJ"
  • "GREAT JOB!!!"
  • "Hello, thank you for your answer for my probability question. However, I think you interpreted the second and third question differently than was meant, as the assumption still stands that a person still independently ranks the n options first. The probability I am after is the probability that this independently determined ranking then is equal to one of the p fixed rankings. Similarly for the third question, where the x people choose their ranking independently, and then I want the probability that for x people this is equal to one particular ranking. I was wondering if you could help me with this. "
Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.