   Chapter 6.1, Problem 67E ### 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 67-72, find the present value of the income c (in dollars) over f, years at the given annual inflation rate r. See Examples 6 and 7. c = 5000 , r = 4 % , t 1 = 4  years

To determine

To calculate: The present value of the income c=5000(in dollars) over t1=4years at the annual inflation rate of r=4%.

Explanation

Given Information:

The annual rate of inflation is 4%. The income is c=5000(in dollars) and the time period is 4 years.

Formula used:

If c represents a continuous income function in dollars per year and the annual rate of inflation is r (in decimal form), then the actual total income over t1 years is given by

Actual income over t1years =0t1c(t)dt

and its present value is given by

Present value=0t1c(t)ertdt

Calculation:

The annual rate of inflation is 4%, i.e. r=0.04

The income c(t)=5000

The present value of the income using, Present value=0t1

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