You are saving for your retirement by investing $1000 per month in an annuity with a guaranteed interest rate of 6% per year. With a continuous stream of investment and continuous compounding, how much will you have accumulated in the annuity by the time you retire in 15 years Round your answer to the nearest cent.
A)$180,000.00
B) $1,459.60
C) $691,920.62
D) $281,313.93
E) $291,920.62

Question

You are saving for your retirement by investing $1000 per month in an annuity with a guaranteed interest rate of 6% per year. With a continuous stream of investment and continuous compounding, how much will you have accumulated in the annuity by the time you retire in 15 years  Round your answer to the nearest cent.  
A)$180,000.00
B) $1,459.60
C) $691,920.62
D) $281,313.93
E) $291,920.62

Quizplus · Accepted Answer

The future value of a continuously compounded annuity can be calculated using the formula: FV = P * (e^(rt) - 1) / (e^r - 1), where P is the monthly contribution, r is the annual interest rate, and t is the number of years. Plugging in the values: P = $1000, r = 0.06, t = 15, the future value is approximately $291,920.62.

You Are Saving for Your Retirement by Investing $1000 Per