Company C showed a profit of $1.3 million last year. The CEO ofthe company expects the profit to decrease by 2% each year over thenext five years and the profits will be continuously invested in anaccount bearing a 4.75% APR compounded continuously.
(a) Write the flow rate, R, of the income stream. (Lett represent the number of years after the company showed aprofit of $1.3 million.)
R(t) =Ă‚Â Ă‚Â
1.3·(95100​)t
Ă‚Â Ă‚Â Ă‚Â million dollars per year
(b) Calculate the 5-year future value. (Round your answer to threedecimal places.)
$Ă‚Â Ă‚Â million
(c) Calculate the 5-year present value. (Round your answer to threedecimal places.)
$Ă‚Â Ă‚Â million
