Harvesting Forests The following equation models the approximate volume in cubic feet of a typical Douglas fir tree of age t years.26
The lumber will be sold at $10 per cubic foot, and you do not expect the price of lumber to appreciate in the foreseeable future. On the other hand, you anticipate a general inflation rate of 5% per year, so the present value of an item that will be worth $v in t years’ time is given by
At what age (to the nearest year) should you harvest a Douglas fir tree to maximize its present value? How much (to the nearest constant dollar) will a Douglas fir tree be worth at that time?
Trending nowThis is a popular solution!
Chapter 5 Solutions
Applied Calculus
- Rachel invests $15,000 at age 25. She hopes the investments will be worth when she turns 40. If the interest compounds continuously, approximately what rate of growth will she need to achieve her goal?arrow_forwardYou invest $6000 at an annual rate of 4. Find the balance after 7 years for each type of compounding. a.Quarterlyb.Monthlyc.Continuousarrow_forward
- Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:CengageCollege AlgebraAlgebraISBN:9781305115545Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning
- Calculus For The Life SciencesCalculusISBN:9780321964038Author:GREENWELL, Raymond N., RITCHEY, Nathan P., Lial, Margaret L.Publisher:Pearson Addison Wesley,