Answer:
<em>a. $42,572 at 2%, </em>
<em>b. $35,559 at 5% </em>
<em>c. $29,702 at 8% </em>
Step-by-step explanation:
The formula used for FV calculation for Continuous Compounding is as under:
Where,
FV = Future Value = $8000 each year (At the end of 6 years = $8000 x 6 = $48,000)
PV = Present Value
e = Mathematical Constant = 2.713
i = Interest Rate
t= time in years
a) For 2%:
b) For 5%:;
c) For 8%:
Note: <em>Investing $42,572 at 2%, $35,559 at 5% and $29,702 at 8% today will get $48,000 at the end of 6 years. </em>