Continuously compounded lump sum investment

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You have your choice of 3 investments. Investment A is a 15-year annuity that features end of month $1500 payments and has an interest rate of 5.5% compounded monthly. Investment B is a 5 percent continuously compounded lump sum investment also for 15 years.

a) How much would you need to invest in B today for it to be worth as much as investment A in 15 years from now?

b) If you invested the same amount as in B in a consol [C] and it paid 5% what would it pay annually?

Reference no: EM13730633

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