00:01
So if we're told about this jackpot being worth $100 ,000 in the future, and we're assuming it has a 4 % continuous compound rate, so since it's continuous, we would want to use the formula p of t is equal to p .0 times e to the r t.
00:19
And what we would do is we'll first set this equal to 100 ,000.
00:27
So we're trying to figure out, so this p .0 is the initial.
00:31
So like, what we would get, paid out right now if we were to take it.
00:34
So we don't know that.
00:35
That's what we're looking for.
00:36
And then we have e to the rt where r is our rate, so we need to convert that to a decimal, so it would be 0 .04.
00:44
And then we have some time t.
00:47
So at least with how the problem was written here, it doesn't tell us what the time is.
00:56
But if, for example, the time was, say, 20 years, because this is normally how long they would pay it out over, i would go back and double check to see what time or how long this jackpot is supposed to pay out over, and you would just plug that value in for your time as opposed to 20 here.
01:16
So that's the only kind of caveat that i would say is kind of missing from this problem.
01:22
But let's go ahead and plug that in, assuming that it is over 20 years, then again, like i was saying, if the time period they're paying this out over is something different than 20 years, just plug in whatever your value is here, but all the steps will still be the same.
01:37
Otherwise, so now we're going to go ahead and figure out what that is...