Respuesta :
Answer:
Present value = $4,122.4
Accumulated amount = $4,742
Step-by-step explanation:
Data provided in the question:
Amount at the Start of money flow = $1,000
Increase in amount is exponentially at the rate of 5% per year
Time = 4 years
Interest rate = 3.5% compounded continuously
Now,
Accumulated Value of the money flow = [tex]1000e^{0.05t}[/tex]
The present value of the money flow = [tex]\int\limits^4_0 {1000e^{0.05t}(e^{-0.035t})} \, dt[/tex]
= [tex]1000\int\limits^4_0 {e^{0.015t}} \, dt[/tex]
= [tex]1000\left [\frac{e^{0.015t}}{0.015} \right ]_0^4[/tex]
= [tex]1000\times\left [\frac{e^{0.015(4)}}{0.015} -\frac{e^{0.015(0)}}{0.015} \right][/tex]
= 1000 × [70.7891 - 66.6667]
= $4,122.4
Accumulated interest = [tex]e^{rt}\int\limits^4_0 {1000e^{0.05t}(e^{-0.035t}} \, dt[/tex]
= [tex]e^{0.035\times4}\times4,122.4[/tex]
= $4,742
The present value and interest accumulated would be as follows:
Present Value = $ 4,122.4
Interest Accumulated = $ 4742
Given that,
Principal at the beginning of money flow = $1,000
Exponential interest rate = 5% per year
Time Period = 4 years
So,
The accumulated money flow's worth = [tex]1000e^{0.05t}[/tex]
The current value of the money can be determined by [tex]\int\limits^4_0 1000e^{0.05t}(e^{-0.035t}) {} \, dt[/tex]
On solving, we get
The present value = $ 4,122.4
Interest Accumulated = $4,742
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