TVM and continuous compounding. Note: In answering questions 1 and 2, DO NOT use the TVM keys; rather use the ln (natural log) and ex keys found on your calculator.
1: Another friend has asked for your help. She currently has $5,436.60 in an account that is paying 10% annual interest and is compounded continuously. What she wants to know is how much was her initial deposit to this account 10 years ago? Use your calculator to determine the original deposit amount. Show the steps that you used to arrive at your answer. Check figure: Original deposit was $2,000.01.
2: You have $50,000 to invest. What nominal interest rate, compounded continuously, do you need to earn on your investment to reach $75,000 in 10 years? Show the steps you used to arrive at your answer.