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Goryan [66]
4 years ago
12

(1 point) Redo problem 15 in section 6.3 of your textbook (page 289). Suppose that the machinery in question costs $119000 and e

arns profit at a continuous rate of $67000 per year. Use an interest rate of 7% per year, compounded continuously. When is the present value of the profit equal to the cost of the machinery? Round your answer to the nearest tenth of a year.
Business
1 answer:
lana66690 [7]4 years ago
8 0

Answer:

Time will be 8.20 year

Explanation:

We have given that the machinery cost A = $11900

And principal amount P = $67000

Rate of interest r = 7 % = 0.07

We have to find the time t

We know that formula

A=Pe^{rt}

119000=67000e^{0.07t}

1.776=e^{0.07t}

0.07t=ln1.776

0.07t=0.5743

t = 8.20 year  

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