Question 1: Two brothers each deposited $5,000 per year for 10 years into different annuity plans. Abraham received an APY of 5%, while Mel, according to him, got a much higher rate at 5% due to continuous compounding. After 10 years, how much more did Mel have because of continuous compounding? Round to the nearest dollar amounts.
The excess amount that Mel had because of continuous compounding is $_____.
Question 2. Ellis Autotrol, Inc., plans to install an eco-friendly energy recovery system that will cost an estimated $86,900 if it is installed 10 years from now. The company uses an interest rate of 13% per year compounded continuously.
How much could it spend now?
The amount that Ellis Autotrol, Inc., could spend now is $_______.
Question 3: Environmental recovery company RexChem Partners plans to finance a site reclamation project that will require a 4-year cleanup period. If the company borrows $4.1 million now, how much will the company have to get at the end of each quarter in order to earn 15% per year, compounded quarterly on its investment? Calculate the answer using both the formula and spreadsheet function.
In order to earn 15% per year compounded quarterly on its investment at the end of each quarter, the company will have to get $____.