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Equal end-of-period semiannual payments of $500, increasing by $100 with each subsequent payment, are made to...

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Finance

Equal end-of-period semiannual payments of $500, increasing by$100 with each subsequent payment, are made to a fund paying 10percent compounded continuously. What will the fund amount to after7 years? What is the present worth equivalent of the total set ofpayments? What is the equal semiannual equivalent amount of thepayments?

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4.2 Ratings (655 Votes)
First convert continuous compounded rate to semiannual rate as follows If the annual effective rate is i then continuous compounded rate is ln1i So ln1i 10 1i e10 1 i    See Answer
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Equal end-of-period semiannual payments of $500, increasing by$100 with each subsequent payment, are made to a fund paying 10percent compounded continuously. What will the fund amount to after7 years? What is the present worth equivalent of the total set ofpayments? What is the equal semiannual equivalent amount of thepayments?

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