<PRE><B>Question 185523</B>
a promisorry note will pay $60,000 at maturity 20 years from now. If you pay $20,000 for the note now, what rate compounded continously would you earn? Use the formula A=Pe^rt
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60,000 = 20,000*e^(20r)
e^(20r) = 3
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Take the natural log of both sides to get:
20r = ln3
r = (ln3)/20 = 0.05493
Rate = 5.493%
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Cheers,
Stan H.
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