Calculus with Applications (10th Edition)

Published by Pearson
ISBN 10: 0321749006
ISBN 13: 978-0-32174-900-0

Chapter 8 - Further Techniques and Applications of Integration - Chapter Review - Review Exercises - Page 456: 48

Answer

$$ \left( f(x)=150,e^{0.04t}, \quad r =5, \quad 6 \% \right) $$ If $f(t)=150e^{0.04t} $ is the rate of continuous money flow at an interest rate $r=0.06$ for $T=5 $ years, then the present value is $$ \begin{aligned} P & =\int_{0}^{T} f(x) e^{-rt}dt\\ &=\int_{0}^{5} 150 e^{0.04 t} e^{-0.06 t} d t \\ & \approx 713.7193647 \end{aligned} $$

Work Step by Step

$$ \left( f(x)=150,e^{0.04t}, \quad r =5, \quad 6 \% \right) $$ If $f(t)$ is the rate of continuous money flow at an interest rate $r$ for $T$ years, then the present value is $$ P=\int_{0}^{T} f(x) e^{-rt}dt. $$ If $f(t)=150e^{0.04t} $ is the rate of continuous money flow at an interest rate $r=0.06$ for $T=5 $ years, then the present value is $$ \begin{aligned} P & =\int_{0}^{T} f(x) e^{-rt}dt\\ &=\int_{0}^{5} 150 e^{0.04 t} e^{-0.06 t} d t \\ &=\int_{0}^{5} 150 e^{-0.02 t} d t \\ &=\left.\frac{150}{-0.02} e^{-0.02 t}\right|_{0} ^{5} \\ &=-7500\left(e^{-0.1}-e^{0}\right) \\ &=-7500\left(e^{-0.1}-1\right) \\ & \approx 713.7193647 \end{aligned} $$
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