By the Year 2016 You Will Have Made Your First

question 17

Multiple Choice

By the year 2016 you will have made your first million dollars.You invest it in a new company on January 1, 2017.The new company starts to earn a profit six months later.Thus, starting July 1, 2017, you receive income from the company in a continuous stream at a constant rate of 1/2 million dollars per year. Your bank offers interest at a nominal rate of 8% per year, compounded continuously.Consider the date when will you have received an income of $1 million from the company.(Do not take into account the bank's interest; this question is simply asking when the total income you have received will reach $1 million.) Which of the following is true?

• A)Your investment paid off on that date.
• B)Your investment paid off before that date
• C)Your investment will not be paid off until after that date