Provide an appropriate response.
-Graph the function which calculates the present value of an amount of $5000 at an annual nominal rate of 7% compounded continuously for 0 c t c 10.Use the formula P = Ae-rt.

Question

Quizplus · Accepted Answer

The graph should show the relationship between the present value and time (the continuous variable t in P = Ae-rt). The given formula is already in the correct form, so we can see that the value of P decreases over time as t increases. Using software to graph the function would show a curve that starts at P = 5000 (when t = 0) and approaches 0 as t approaches 10. Choice B has the correct graph. The other choices are either not relevant to the question or do not show the correct relationship between P and t.

Provide an Appropriate Response