The formula for the present value of a continuous income stream is given by:
\[P = \int_{0}^{m} Ie^{-rt} dt\]
where:
- \(P\) is the present value,
- \(I\) is the income stream,
- \(r\) is the interest rate, and
- \(m\) is the time.
In this case, \(I = \$2000\),
Show more…