Explanation Given information: The Company needs $500,000 in two years’ time for renovations and can earn 9% interest on investments. Formula used: Present value , P = ∫ 0 M S ( t ) e − r t d t Where S ( t ) is sale rate per year, t is the time, P is present value and r is rate of interest. Calculation: From the given information, we have S ( t ) = 500 , 000 r = 9 % = 0.09 M = 2 years We know that, Present value , P = ∫ 0 M S ( t ) e − r t d t P = ∫ 0 2 500 , 000 To determine (b) To find: The rate should the money be deposited so that you have $500,000 when needed.

Applied Calculus, 6e WileyPLUS + Loose-leaf

6th Edition

ISBN: 9781119408901

Author: Deborah Hughes-Hallett, Andrew M. Gleason, Patti Frazer Lock, Daniel E. Flath

Publisher: Wiley (WileyPLUS Products)

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Chapter 6.5, Problem 16P

To determine

(a)

To find:

The present value of the renovations.

To determine

(b)

To find:

The rate should the money be deposited so that you have $500,000 when needed.

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Chapter 6.5, Problem 15P

Chapter 6.5, Problem 17P

Chapter 6 Solutions

Applied Calculus, 6e WileyPLUS + Loose-leaf

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(a) To find: The present value of the renovations.

Solution Summary: The author explains that the present value of the renovations is 915165.49. The company needs 500,000 in two years' time for renovation and can earn 9% interest on investments.