A 58-year-old couple are considering opening a business of their own. They will either purchase anestablished Gift and Card Shoppe or open a new Video Rental Palace.The Gift Shoppe has a continuous income stream with an annual rate of flow (in dollars per year) at timet given by?(?) = 40,000The Video Palace has a continuous income stream with a projected annual rate of flow (in dollars peryear) at time t given by V(t)=24,600e0.08tThe initial investment is the same for both businesses, and money is worth 10% compoundedcontinuously. Determine which is the better buy by finding the present value of each business over thenext 8 years (until the couple reach age 66)._________________________________________________________
A 58-year-old couple are considering opening a business of their own. They will either purchase an
established Gift and Card Shoppe or open a new Video Rental Palace.
The Gift Shoppe has a continuous income stream with an annual rate of flow (in dollars per year) at time
t given by
?(?) = 40,000
The Video Palace has a continuous income stream with a projected annual rate of flow (in dollars per
year) at time t given by V(t)=24,600e0.08t
The initial investment is the same for both businesses, and money is worth 10% compounded
continuously. Determine which is the better buy by finding the present value of each business over the
next 8 years (until the couple reach age 66).
_________________________________________________________
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