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college math

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You won the lottery. They will pay you 1 million dollars a year for 20 years. Assuming 10 percent interest compounded continuously, approximate the present value of your winnings by assuming the money is paid to you continuously over the period of each of the 20 years and in 40 years?

  • college math - ,

    Start with what you know.
    Continuous compound interest tells you that you will be using e^ starting with 1 million dollars. Now just plug in the time(t) at 20yrs and 40yrs into the formula

    Money received(time)=1million(e^(.10)t)

    You should have two diff. answers

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