Lecture Notes on Time Value of Money
This is $.03 more than daily compounding. Try this on your calculator. Find the ex button. e.12 = 1.12749 . Present Value Interest Factor = [e -i t] Problem: What is the present value of $10,000 to be received 3 years from today compounded continuously at 10%?PV = $10,000 x e -.10 x 3 = $10,000 x 0.74082=$7,408 ... You make equal $400 monthly ... ................
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