Question

1) The newly opened Mario's Trattoria is expected to produce a continuous income stream at the rate of
R(t) = 130,000
dollars/year for the next 3 years. If the prevailing interest rate is 3.6%/year compounded continuously, find the future value of this income stream. (Round your answer to two decimal places.)

2) Suppose an investment is expected to generate income at the rate of
R(t) = 200,000
dollars/year for the next 9 years. Find the present value of this investment if the prevailing interest rate is 8%/year compounded continuously. (Round your answer to two decimal places.)

3) Camille purchased a 14-year franchise for a computer outlet store that is expected to generate income at the rate of
R(t) = 400,000
dollars/year. If the prevailing interest rate is 10%/year compounded continuously, find the present value of the franchise. (Round your answer to the nearest whole number.)

Answer 1

Answer:

Step-by-step explanation:

1) The newly opened Mario's Trattoria is expected to produce a continuous income stream at the rate of

R(t) = 130,000 to generate income at the rate of

R(t) = 200,000 Camille purchased a 14-year franchise for a computer outlet store that is expected to generate income at the rate of

R(t) = 400,000