Question

Find the amount of a continuous money flow in which $250 per year is being invested at 6.5%, compounded continuously for 10 years.

Answer 1

The amount of a continuous money flow is approximately $478.77.

Step-by-step explanation:

To find the amount of a continuous money flow, we can use the formula A = P e^(rt), where A is the final amount, P is the principal (initial investment), e is Euler's number (approximately 2.71828), r is the interest rate, and t is the time in years.

In this case, P = $250, r = 6.5% (converted to decimal form as 0.065), and t = 10 years.

So,

A = 250 * e^(0.065 * 10) = 250 * e^0.65 = 250 * 1.91508 = $478.77.

Therefore, the amount of the continuous money flow after 10 years is approximately $478.77.