Suppose you are promised an investment of an amount of k Ghana cedis into a fund at the beginning of every year forever. If the annual effective rate of interest is i, the annual effective discount rate is d and we denote the present value of the promised investment by ¨a ∞ Evaluate ¨a ∞ i , then show that a ¨ ∞ i = k 0.01 if k = 864.85 Ghana cedis.

Intermediate Algebra

10th Edition

ISBN:9781285195728

Author:Jerome E. Kaufmann, Karen L. Schwitters

Publisher:Jerome E. Kaufmann, Karen L. Schwitters

Chapter11: Exponential And Logarithmic Functions

Section11.2: Applications Of Exponential Functions

Problem 1PS

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Question

Suppose you are promised an investment of an amount of k Ghana cedis into a fund at the beginning of every year forever. If the annual effective rate of interest is i, the annual effective discount rate is d and we denote the present value of the promised investment by ¨a ∞ Evaluate ¨a ∞ i , then show that a ¨ ∞ i = k 0.01 if k = 864.85 Ghana cedis. d A62metre length of rope is cut into pieces whose lengths are in arithmetic progression witha common difference of d metres. Given that the lengths of the shortest and the longest pieces are 0.5 and 3.5 metres respectively, find d.

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