Find the present and future values of an income stream of 11000 dollars a year for 17 years. The interest rate is 9% compoundedcontinuously.Round your answers to 2 decimal places.Part 1The present value represents the amount of money you would have to deposit today in order to match what you would get fromthe income stream at the future date. The formula isPresent Value =MS(t)e" dt.Future value represents the total amount of money you would have if you deposit the income stream until a future date. Theformula isFuture Value - Present Value* erMTo start our problem we need to identify the variables.Time = M = iyearsRate = r = i%Income Stream S(t) = idollars/year

Input the following values:Payment (PMT): $11,000 (positive value since it's income)Number of…

Answered: Find the present and future values of…

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter13: Capital, Interest, Entrepreneurship, And Corporate Finance

Section: Chapter Questions

Problem 13PAE

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Cash Flow is based on the notion that a dollar paid in the future is less valuable than a dollar paid today. Part 2 The present value of a loan in which $1000 is to be paid out a year from today with the interest rate equal to 5% is $. (Round your response to the neareast two decimal place) Part 3 If a loan is paid after two years, and the amount $7000 is to be paid then with a corresponding 7% interest rate, the present value of the loan is $. (Round your response to the neareast two decimal place)
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3. You just inherited P1,000,000. While you plan to squander some of it away, how much should you deposit in an account earning 5% interest per year if you would like to have P1,000,000 in the account in 10 years?
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