Answer:
$3,033.56
Step-by-step explanation:
(see attached for reference)
The formula for compound interest is given by
A = P [ 1 + (r/n) ]^(nt)
Where,
A = final amount (we are asked to find this)
P = principal = given as $1500
r = annual interest rate = 9% = 0.09
n = 2 (for compounding semi-annually)
t = time, given as 8 years
Substituting the above into the equation:
A = P [ 1 + (r/n) ]^(nt)
A = 1500 [ 1 + (0.09/2) ]^[(2)(8)]
A = 1500 [ 1.045) ]^[16]
A = $3,033.56
It is convenient to let a spreadsheet or graphing calculator do the math for this. Functions can be defined for cost and profit, and evaluated at each of the volumes of interest.
a1) For 200 cars, the Outside location yields the greatest profit
a2) For 300 cars, the City location yields the greatest profit
b) The sites yield the same profit for a volume of 278 cars.
