Solve the Problem. -The Rate of Flow of Income from a Continuous Income

question 81

Multiple Choice

Solve the problem.
-The rate of flow of income from a continuous income stream is given by Find the future value of this income stream at 8% compounded continuously for six years. (Round answer to the nearest dollar.)

• A) $2743
• B) $2706
• C) $14,286
• D) $4375

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Definitions:

Permanent

Something that is meant to last or continue indefinitely without change.

Disposable Income

Refers to the sum of money available to families for spending and saving purposes once income taxes have been deducted.

APC

Average Propensity to Consume; the ratio of total consumption to total disposable income.

45-Degree Line

A graphical representation in economics, typically used in Keynesian cross diagrams, showing points where aggregate expenditure equals total output or income.