The problem is:
Percy invests continuously at a rate of 100 per annum for 40 years in a fund earning 5% per annum compounded continuously. At the end of 60 years, X is in the fund. There are no withdrawals.
Determine X.
if I convert delta to i using delta = ln(1+i)
and use 100*Sn_40 * (1+i)^20
but the answer is different from if I use 100*S_continuously * e^(delta*20)
Can anyone explain to me the logic behind this? as in why can't I calculate using the annual rate.
And if I want to calculate using annual rate, how do I do it?
Percy invests continuously at a rate of 100 per annum for 40 years in a fund earning 5% per annum compounded continuously. At the end of 60 years, X is in the fund. There are no withdrawals.
Determine X.
if I convert delta to i using delta = ln(1+i)
and use 100*Sn_40 * (1+i)^20
but the answer is different from if I use 100*S_continuously * e^(delta*20)
Can anyone explain to me the logic behind this? as in why can't I calculate using the annual rate.
And if I want to calculate using annual rate, how do I do it?
FV using force of interest and annual interest
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