By the Year 2016 You Will Have Made Your First

question 72

Short Answer

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 6% per year, compounded continuously.Suppose T is measured in years from January 1, 2017.Compute the future value of your original investment of $1 million at time T and the future value at time T of the income that you have received by that time.Use these to determine how many years, T, it will take for your investment to have paid off.Round to 2 decimal places.

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Definitions:

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