Continuously compounded lump sum investment

Assignment Help Financial Management

Reference no: EM13730633

You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 15 years.

a) How much would you need to invest in B today for it to be worth as much as investment A in 15 years from now?

b) If you invested the same amount as in B in a consol [C] and it paid 5% what would it pay annually?

Reference no: EM13730633

Questions Cloud

Interpretation of the requirements of the flsa : StopNShopToday, Inc., founded in 1991, is a family-owned corporation with 15 combination convenience store/gas station locations and approximately 150 employees. A store manager is responsible for each store location. All accounting, budgeting, pa..

Variable selling and administrative expenses : A company produces a single product. Variable production costs are $13.6 per unit and variable selling and administrative expenses are $4.6 per unit. Fixed manufacturing overhead totals $52,000 and fixed selling and administration expenses total $56,..

Foreclosure and the laws protecting a foreclosed property : Three references are required. Two must be from the APUS Library. Of course, you may use your text as a reference, as well as other sources if they are valid sources. Wikipedia is NOT a valid source. Dictionaries and encyclopedias may be used; howeve..

Briefly discuss your reaction to the jamestown fiasco essay : After reading the essay The Jamestown Fiasco , I want you to briefly discuss your reaction to the essay. What do you think was the primary motivation for most people who came to the colonies?

Continuously compounded lump sum investment : You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 1..

Analyze marketing strategies in reaching markets : Analyze marketing strategies in reaching markets with their products or services

Description of the visual pictures : Design a political commercial. You will need to have a transcript of the text and a clear detailed description of the visual pictures to be used in your commercial. Your commercial should take a strong position and discuss the advantages and disad..

The firms cost of preferred stock financing : The preferred stock of gator industries sells for $35.86 and pays $2.72 per year in dividends. what is the cost of preferred stock financing? if gator were to issue 483,000 more preferred shares just like the ones it currently has outstanding.

Calculate the accounting break-even point : Evaluate project that costs $1.5 million has a 10-year life and no salvage value. Assume depreciation is straight line over the life of the project. Sales are projected at 150K units every year over the life of the project. Price per unit is $75, var..

User Account

All Pages