   Chapter 6, Problem 13RE ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919

#### Solutions

Chapter
Section ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919
Textbook Problem
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# Finding Present Value In Exercises 13–16, find the present value of the income c (in dollars) over t1 years at the given annual inflation rate r. c = 20 , 000 ,   r = 4 % ,   t 1 = 5   years

To determine

To calculate: The present value of the income (c, in dollar) of 20,000 (c, in dollar) over a time period (t1) of 5 years at an annual inflation rate (r) of 4%.

Explanation

Given Information:

The value of income, c, is 20,000 dollar.

The time period, t1, is 5 years.

The rate of the annual inflation, r, is 4%.

Formula used:

The expression for the present value is written as,

Present value=0t1c(t)ertdt

Here, r is the rate of inflation and c(t) represents the income which is a function of time t.

Calculation:

Recall the expression of the present value.

Present value=0t1c(t)ertdt

Substitute 5 for t1, 20,000 for c(t) and 0.04 for r.

Present value=0520,000e0

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