Chapter 6.4, Problem 38E

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

10th Edition
Ron Larson
ISBN: 9781305860919

Chapter
Section

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

10th Edition
Ron Larson
ISBN: 9781305860919
Textbook Problem
1 views

# Present Value A farm is expected to yield a continuous flow of profit at the rate of $75,000 per year. Assuming an annual interest rate of 8% compounded continuously, what is the present value of the farm(a) for 20 years?(b) forever? (a) To determine To calculate: The present value of the farm if the continuous flow of profit at rate of$75,000 per year and interest rate is 8% compounded continuously for 20 years.

Explanation

Given Information:

Provided information is:

Profit is P=$75,000 and annually interest rate is r=8%. Formula used: Present value of Perpetuity: Present value=P0tertdt Here, P is the size of each annual payment, t is the time and r is the annual interest rate in decimal form. Calculation: Consider the provided information and recall the formula for present value. Present value=P0tertdt Interest in fraction form is: r=8%=8100=0.08 Substitute$75,000 for P and 0

(b)

To determine

The present value of the farm if the continuous flow of profit at rate of \$75,000 per year and interest rate is 8% compounded continuously for forever.

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

## Additional Math Solutions

#### Convert the expressions in Exercises 6584 to power form. x2x

Finite Mathematics and Applied Calculus (MindTap Course List)

#### In Exercises 41-48, find the indicated limit given that limxaf(x)=3 and limxag(x)=4 45. limxag(x)

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

#### For j – 2k 3i – 4k 3i + j – 2k 0 (zero vector)

Study Guide for Stewart's Multivariable Calculus, 8th

#### True or False: By the Integral Test, converges.

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th