posted by caroline
A tax free municipal bond pays 4.75% compounded continuously. What is the value of a $2,000 bond after 30 years? Round your answer to the nearest cent.
[Hint- A=P e^rt where P= present(initial) value, A= future value, r= annual rate, and t= number of years]
P.S.The rt is an exponent to e
A = P*e^rt.
P = $2,000
rt = 0.0475/yr. * 30yrs. = 1.425.
A = ?.