Post by sourpatchkids on Nov 28, 2016 0:59:55 GMT
WW32: Problem 5
(1 pt) Redo problem 15 in the Chapter 6 Review problems of your textbook (page 295) assuming that the parents need $105000 in 10 years for college expenses, and that the bank account earns 12% compounded continuously. Round your answers to the nearest cent. (You may need to compute your answers to 4 or more decimal places before you round to the nearest cent.)
a) At what constant, continuous rate must the parents deposit money into the account in order to save the money?
Answer:
b) If the parents instead deposit a lump sum now, how much must the deposit be to attain the goal?
Answer:
WW32: Problem 11
(1 pt) Complete problem 7 in section 6.3 in your textbook (page 288) using the following information in place of that in the book. The machine earns the company revenue at a continuous rate of 68000t+42000 dollars per year during the first six months of operation, and at the continuous rate of $76000 per year after the first six months. The cost of the machine is $160000. The interest rate is 5.75% per year, compounded continuously.
a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent.
Value: $
b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth.
WW32: Problem 12
(1 pt) Your rich uncle bequests to you a continuous, constant income stream of $2000 per year for the next 20 years. The terms of the bequest require that this income stream be paid continuously into a specific savings account that will not be available to you for 20 years. This account earns 5.8% interest, compounded continuously.
What is the present value of the bequest?
How much money would the bequest be worth (including all interest accrued) after 20 years?
You discover that a bank is offering 6.3% interest compounded continuously on a certificate of deposit (CD) that matures in 20 years.
What is the cost of a CD at the above interest rate that would provide the same amount of money as the bequest after 20 years?
You ask the executor of the estate to buy a CD now whose value after 20 years will be the same as the amount that would be available to you in 20 years under the origional terms of the bequest, and to pay you the difference between the present value of the original bequest and the amount invested in the CD.
How much do you get now?
(1 pt) Redo problem 15 in the Chapter 6 Review problems of your textbook (page 295) assuming that the parents need $105000 in 10 years for college expenses, and that the bank account earns 12% compounded continuously. Round your answers to the nearest cent. (You may need to compute your answers to 4 or more decimal places before you round to the nearest cent.)
a) At what constant, continuous rate must the parents deposit money into the account in order to save the money?
Answer:
b) If the parents instead deposit a lump sum now, how much must the deposit be to attain the goal?
Answer:
WW32: Problem 11
(1 pt) Complete problem 7 in section 6.3 in your textbook (page 288) using the following information in place of that in the book. The machine earns the company revenue at a continuous rate of 68000t+42000 dollars per year during the first six months of operation, and at the continuous rate of $76000 per year after the first six months. The cost of the machine is $160000. The interest rate is 5.75% per year, compounded continuously.
a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent.
Value: $
b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth.
WW32: Problem 12
(1 pt) Your rich uncle bequests to you a continuous, constant income stream of $2000 per year for the next 20 years. The terms of the bequest require that this income stream be paid continuously into a specific savings account that will not be available to you for 20 years. This account earns 5.8% interest, compounded continuously.
What is the present value of the bequest?
How much money would the bequest be worth (including all interest accrued) after 20 years?
You discover that a bank is offering 6.3% interest compounded continuously on a certificate of deposit (CD) that matures in 20 years.
What is the cost of a CD at the above interest rate that would provide the same amount of money as the bequest after 20 years?
You ask the executor of the estate to buy a CD now whose value after 20 years will be the same as the amount that would be available to you in 20 years under the origional terms of the bequest, and to pay you the difference between the present value of the original bequest and the amount invested in the CD.
How much do you get now?