Consider the following cash flows: Year Cash Flow 2 $ 22,200 3 40,200 5 58,200 Assume an interest rate of 9 percent per year. a.
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Answer: The amount invested in the dogwood tree was $5000, while $35000 was invested in the red maple tree.
We arrive at the answer as follows:
Let the proportion of dogwood trees be x.
Then the proportion of red maple trees in the nursery will be 1-x, since there are only two types of trees in the nursery.
We use the following formula to find the proportion dogwood and maple trees in the nursery:
Solving for x we get
We can find the proportion of maple trees as follows:
Since we have the proportions, we can easily find the amount invested in type of tree as follows: