Homework Help: college math

Posted by aj on Monday, March 14, 2011 at 9:54pm.

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 - sigfig, Friday, March 18, 2011 at 2:04pm
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 recieved(time)=1million(e^(.10)t)

You should have two diff. answers

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