Question 1: How much will $100 grow to if invested at a continuously compounded interest rate of 10% for 8 years? What if it is invested for 10 years at 8%.
Question 2: A local bank will pay you $100 a year for your lifetime if you deposit $2500 in the bank today. If you plan to live forever, what interest rate is the bank paying?
Question 3: A property will provide $10,000 a year forever. If its value is $125,000, what must be the discount rate?