The present value Pis the investment that is required today to yield a future value of B. If interest is compounded continuously at an APR of r, as a decimal, then the present value for an investment that will yield B future dollars after t years is given by P- Be"rt dollars. (a) Write a formula for the present value as a function time if the APR is 7% and the future value is B = 7000 dollars. P(t) = (b) Make a graph of the function you found in part (a). Use a horizontal span of 0 to 25 years. P P P 6000 6000 6000- 6000 4000 4000 4000 4000- 2000 2000 2000 2000- 5 10 15 20 25 5 10 15 20 25 10 15 20 25 10 15 20 25 (c) Does a small change in time have a greater effect on the present value at 1 year in the future or at 10 years in the future? A small change in time has a greater effect on the present value at --Select-- v in the future.

The present value Pis the investment that is required today to yield a future value of B. If interest is compounded continuously at an APR of r, as a decimal, then the present value for an investment that will yield B future dollars after t years is given by P- Be"rt dollars. (a) Write a formula for the present value as a function time if the APR is 7% and the future value is B = 7000 dollars. P(t) = (b) Make a graph of the function you found in part (a). Use a horizontal span of 0 to 25 years. P P P 6000 6000 6000- 6000 4000 4000 4000 4000- 2000 2000 2000 2000- 5 10 15 20 25 5 10 15 20 25 10 15 20 25 10 15 20 25 (c) Does a small change in time have a greater effect on the present value at 1 year in the future or at 10 years in the future? A small change in time has a greater effect on the present value at --Select-- v in the future.

Algebra and Trigonometry (6th Edition)

6th Edition

ISBN:9780134463216

Author:Robert F. Blitzer

Publisher:Robert F. Blitzer

ChapterP: Prerequisites: Fundamental Concepts Of Algebra

Section: Chapter Questions

Problem 1MCCP: In Exercises 1-25, simplify the given expression or perform the indicated operation (and simplify,...

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Differential Equations

Have you ever observed the movement of the satellites and rockets or how the planets go around the sun in their orbits? How will you determine their motion? Definitely they follow some scientific laws and these kinds of problems are framed as differential equations.

Question

The present value Pis the investment that is required today to yield a future value of B. If interest is compounded continuously at an APR of r, as a decimal, then the present value for an investment that will yield B future dollars after t years is given by
P = Be-rt dollars.
(a) Write a formula for the present value as a function of time if the APR is 7% and the future value is B = 7000 dollars.
P(t) =
(b) Make a graph of the function you found in part (a). Use a horizontal span of 0 to 25 years.
P
P
P
6000-
6000
6000
6000
4000
4000
4000
4000
2000
2000
2000
2000
10
15
20
25
10
15
20
25
10
15
20
25
5
10
15
20
25
(c) Does a small change in time have a greater effect on the present value at 1 year in the future or at 10 years in the future?
A small change in time has a greater effect on the present value at --Select--- v in the future.

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