Optimal Selling Time Refer to Exercise 49, page 367. The present value of a piece of waterfront property purchased by an investor is given by the function
Determine the optimal time (based on present value) for the investor to sell the property. What is the property’s optimal present value?
49. Real Estate Investments An investor purchased a piece of waterfront property. Because of the development of a marina in the vicinity, the market value of the property is expected to increase according to the rule
where V(t) is measured in dollars and t is the time in years from the present. If the rate of appreciation is expected to be 9% compounded continuously for the next 8 years, find an expression for the present value P(t) of the property’s market price valid for the next 8 years. What is P(t) expected to be in 4 years?
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Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach
- Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:Cengage