7. Suppose you find an investment account that you decide to contribute to every month over the course of 30 years. The investment has an average rate of return of 5.2%, compounding daily. Also, you decide to start the account with an initial amount of $10,000, and that your monthly contributions will be $1000. How much is the account worth after 30 years? Suppose, for the sake of simplicity that the account compounds continuously, and that your contributions to the account are spread out evenly (continuously) over the course of the year.

7. Suppose you find an investment account that you decide to contribute to every month over the course of 30 years. The investment has an average rate of return of 5.2%, compounding daily. Also, you decide to start the account with an initial amount of $10,000, and that your monthly contributions will be $1000. How much is the account worth after 30 years? Suppose, for the sake of simplicity that the account compounds continuously, and that your contributions to the account are spread out evenly (continuously) over the course of the year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 16P

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