Homework SourseA small business expects an income stream of 200 per month f
A small business expects an income stream of $200 per month for a period of 18 years. The income will be invested at an annual interest rate of 9.6%, compounded continuously. How much interest was earned? Round to the nearest dollar. o a) $3, 600 b) $86, 799 c) $72, 535 d) $88, 567 e) $43, 200 
Solution
monthly rate = e0.096*1/12 - 1 = 0.8032%
rate = 0.8032%, PV = 0, PMT = 200, N = 18*12
use FV funciton in Excel
Future value = 115,272.27
interest = 115,272.27 - 18*12*200 ~ 72,535
