Camille purchased a 20year franchise for a computer outlet s

Camille purchased a 20-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.) $ Find the amount of an annuity if $380/month is paid into it for a period of 22 years, earning interest at the rate of 4%/year compounded continuously. (Round your answer to the nearest dollar.) $

Solution

5. PV=C/e^rt

r=10%=0.1, t=20 years And C=$400,000

PV=400,000/e^.1*20

PV=$54134

And that\'s the answer .