Time value of money

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Tax Consultant
1029 Points Joined March 2012
With continuous compounding of at 10% for 30 years, the future value of an initial investment of Rs 2000 is closest to;

a)34898
b)40171
c)164500
d)328282
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On 27 March 2017 at 10:43 Report
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Asst Mgr-Taxation
6918 Points Joined April 2009

rs2000*17.449=34898

 

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On 27 March 2017 at 11:28
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student
780 Points Joined January 2017
What is continuous compounding?Is it Daily compounding?
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On 27 March 2017 at 14:22
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Tax Consultant
1029 Points Joined March 2012
@ Shilpi. That's nice. Same doubt here. And the answer by ICAI is option no (b).
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On 27 March 2017 at 16:17
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student
84 Points Joined June 2016
answer given by icai is correct
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On 28 March 2017 at 03:55
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student
84 Points Joined June 2016
2000*20.0707 = 40141.4
its approx 40171
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On 28 March 2017 at 03:57
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Asst Mgr-Taxation
6918 Points Joined April 2009

thing which i have to learn it sems

=2000*2.7183^(10%*30)=40172

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On 28 March 2017 at 07:56
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student
780 Points Joined January 2017
@ Narender Kumar ..What is continuous compounding?
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On 28 March 2017 at 09:30
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In the formula, A represents the initial amount in the account. Continuously Compounded Interest is a great thing when you are earning it! Continuously compounded interest means that your principal is constantly earning interest and the interest keeps earning on the interest earned

 

 

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On 28 March 2017 at 09:52
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student
780 Points Joined January 2017
@ Samir ...Is it practical concept ?
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On 28 March 2017 at 10:44
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Tax Consultant
1029 Points Joined March 2012
What is the meaning of continuous or constant?
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On 28 March 2017 at 13:28
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Tax Consultant
1029 Points Joined March 2012
How to arrive at 2.7183?
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On 28 March 2017 at 13:29
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Asst Mgr-Taxation
6918 Points Joined April 2009

constant e=2.7183

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On 28 March 2017 at 16:53


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