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Usimov [2.4K]
3 years ago
15

award a scholarship of $30,000 each year. The family wants the yearly awards to continue indefinitely. Assume that the fund will

earn a fixed interest rate of 6% per year, compounded continuously. What is the size of the initial investment that the family must
Business
1 answer:
vova2212 [387]3 years ago
6 0

Answer:

size of the initial investment $500000

Explanation:

given data

principal = $30000

rate = 6% = 0.06

solution

we get here present value that is express as here

present value =    mP \int\limits^\alpha _0 {e^{-rt}} \, dt    .............1

put her value we get

present value =    (1) (30000) \int\limits^\alpha _0 {e^{-0.06 t}} \, dt

present value =    [\frac{e^-0.06 t}{-0.06}]^{\alpha } _0  

present value = $500000

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Where is market equilibrium located
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