a. An asset that generates $7200 yearly income if the interest rate 5% compounded continuously, then its capital value is $140433.002
b. An asset that generates $7200 yearly income if the interest rate 10% compounded continuously, then its capital value is $68460.59
<u>Step-by-step explanation:</u>
For continuously compound interest
---------------> eq.1
Where
P = principal amount (initial investment)
r = annual interest rate (as a decimal)
t = number of years
A = amount after time t.
Let’s solve the equation
Where,
P is unknown
A = P + 7200 (asset after 1 year) ---------------> eq. 2
<u>Case A:
</u>

t = 1 (1 year)
Substitute all values in the formula (2) using the formula (1),






<u>Case B:</u>

t = 1 (1 year)
Substitute all values in the formula (2) using the formula (1),






Given the value of t3 and t7, and t7 = t3 * r^4, where r represents the geometric quotient.
So 7104 = 444 * r^4 -> solve for r, you will get r = 2 or -2
So, for r = 2, t6 = t7 / r = 7104 / 2 = 3552
For r = -2, t6 = -3552
3.141 in expanded notation is 3 + 0.1 + 0.04 + 0.001
Hope that helps :)
Answer:
0.2
Step-by-step explanation:
20/100=0.2
If you simplify, it equals 10.82e.