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  3. company d showed a profit of $1.5 million last yea

Company D showed a profit of $1.5 million last year. The CEO of the company expects...

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Basic Math

Company D showed a profit of $1.5 million last year. The CEO ofthe company expects the profit to increase by 0.04 million dollarseach year over the next 5 years and the profits will becontinuously invested in an account bearing a 4.5% APR compoundedcontinuously.

(a) Write the flow rate, R, of the income stream. (Lett represent the number of years after the company showed aprofit of $1.5 million.)
R(t) =  

0.04t+1.5

   million dollars per year

(b) Calculate the 5-year future value. (Round your answer to threedecimal places.)
$  million

(c) Calculate the 5-year present value. (Round your answer to threedecimal places.)
$  million

Answer & Explanation Solved by verified expert
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part aFlow rate is given asRt    See Answer
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