Revenue from gas wells that have been in production for at least 5 years tends to follow a decreasing geometric gradient. One particular rights holder received royalties of $4000 per year for years 1 through 6, but beginning in year 7, income decreased by 15% per year through year 14. What was the future value (year 14) of the income from the well, if all of the income was invested at 10% per year?
Revenue from gas wells that have been in production for at least 5 years tends to follow a decreasing geometric gradient. One particular rights holder received royalties of $4000 per year for years 1 through 6, but beginning in year 7, income decreased by 15% per year through year 14. What was the future value (year 14) of the income from the well, if all of the income was invested at 10% per year?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Revenue from gas wells that have been in production for at least 5 years tends to follow a
decreasing geometric gradient. One particular rights holder received royalties of $4000
per year for years 1 through 6, but beginning in year 7, income decreased by 15% per
year through year 14. What was the
all of the income was invested at 10% per year?
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