Final answer:
To find the value of the continuous stream at the end of 5 years with a continuously compounding interest rate of 1.7%, we can use the formula for compound interest.
Step-by-step explanation:
To find the value of the continuous stream at the end of 5 years, we can use the formula for compound interest:
A = P * e^(rt)
Where:
A = the future value
P = the initial investment ($50,000 per year)
r = the interest rate per period (1.7% per year)
t = the number of years
e = the mathematical constant approximately equal to 2.71828
Substituting the given values into the formula, we get:
A = 50,000 * e^(0.017 * 5)
A = 50,000 * e^(0.085)
A ≈ 50,000 * 1.0888999
A ≈ 54,444.99
Rounding to the nearest integer, the value of the continuous stream at the end of 5 years is approximately $54,445.