Calculus: Early Transcendentals
Calculus: Early Transcendentals
8th Edition
ISBN: 9781285741550
Author: James Stewart
Publisher: Cengage Learning
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7. (a) If land that can be farmed L is eroding continuously at a rate of 4.5% per year because
of changing climatic conditions, how much of this land will be left after 25 years?
(b) A piece of art currently worth $2500 is appreciating in value 'V' according to the
formula:
2500et0.5
However, assuming continuous discounting, the present value of V is given by:
P = Vert
=
How long should the piece of art by kept to maximise its present value under continuous
compounding with:
(i) r = 0.05
(ii) r = 0.09
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Transcribed Image Text:7. (a) If land that can be farmed L is eroding continuously at a rate of 4.5% per year because of changing climatic conditions, how much of this land will be left after 25 years? (b) A piece of art currently worth $2500 is appreciating in value 'V' according to the formula: 2500et0.5 However, assuming continuous discounting, the present value of V is given by: P = Vert = How long should the piece of art by kept to maximise its present value under continuous compounding with: (i) r = 0.05 (ii) r = 0.09
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