Concept explainers
Asset Appreciation As the financial consultant to a classic auto dealership, you estimate that the total value (in dollars) of its collection of 1959 Chevrolets and Fords is given by the formula
When would you advise the dealership to sell the vehicles to maximize their discounted value?
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Applied Calculus
- Future Value In certain savings scenarios, the value F of an investment after t years, the future value, is given by F=P1+rt. Here r is the yearly interest rate as a decimal, P is the amount of the original investment and t is the term of the investment. If we invest 1000 at an interest rate of 0.06 per year as a decimal, and if the term of the investment is 5 years, what is the future value?continuedarrow_forwardDrug Concentration When a drug is administered orally, it takes some time before the blood concentration reaches its maximum level. After that time, concentration levels decrease. When 500 milligrams of procainamide is administered orally, one model for a particular patient gives blood concentration C, in milligrams per liter, after t hours as C=2.65(e0.2te2t) What is the maximum blood-level concentration, and when does that level occur?arrow_forwardFuture Value Business and finance texts refer to the value of an investment at a future time as its future value. If an investment of P dollars is compounded yearly at an interest rate of r as a decimal, then the value of the investment after t years is given by FutureValue=P1+rt. In this formula, 1+rt is known as the future value interest factor, so the formula above can be written as FutureValue=PFuturevalueinterestfactor Financial officers normally calculate this or look it up in a table a. What future value interest factor will make an investment double? b. Say you have an investment that is compounded yearly at a rate of 9%. Find the future value interest factor for a 7-year investment. c. Use the results from part b to calculate the 7-year future value if your initial investment is 5000.arrow_forward
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