Exam 6: A Continuous-Compounding-And-Discounting

You have $5,436.60 in an account that pays 10.70% interest,compounded continuously.If you deposited some funds 13 years ago,how much was your original deposit? Round your answer to the nearest dollar.

Assume one bank offers you a nominal annual interest rate of 6.00% compounded daily while another bank offers you continuous compounding at a 5.90% nominal annual rate.You decide to deposit $1,250 with each bank.Exactly two years later you withdraw your funds from both banks.What is the difference in your withdrawal amounts between the two banks? Assume 365 days in a year.Do not round your intermediate calculations.

You need a down payment of $18,400 in order to purchase your first home 4 years from today.You currently have $14,014 to invest.In order to achieve your goal,what nominal interest rate,compounded continuously,must you earn on this investment? Do not round your intermediate calculations.

How much should you be willing to pay for an account today that will have a value of $1,000 in 7 years under continuous compounding if the nominal rate is 8.30%?

If you receive $15,000 today and can invest it at a 8.00% annual rate compounded continuously,what will be your ending value after 20 years?

For a 10-year deposit,what annual rate payable semiannually will produce the same effective rate as 5.75% compounded continuously? Do not round your intermediate calculations.

You place $1,000 in an account that pays 7.00% interest compounded continuously.You plan to hold the account exactly 3 years.Simultaneously,in another account you deposit money that earns 5.20% compounded semiannually.If the accounts are to have the same amount at the end of the 3 years,how much of an initial deposit do you need to make now in the account that pays 5.20% interest compounded semiannually? Do not round your intermediate calculations.

In six years' time,you are scheduled to receive money from a trust established by your grandparents.When the trust matures there will be $100,000 in the account.If the account earns 10.50% compounded continuously,how much is in the account today?