Question 1
Find the accumulated present value of an investment for which there is a perpetual continuous money flow of $1400 per year. The current interest rate is 5%. Round to the nearest dollar.
◦ $56,000
◦ $28,000
◦ $14,000
◦ $1400
Question 2
Plutonium has a decay rate of 0.003% per year. Suppose that a nuclear accident causes plutonium to be released into the atmosphere each year perpetually at the rate of 2 lb per year. What is the limiting value of the radioactive buildup? Round to the nearest pound.
◦ 666,667 lb
◦ 66,667 lb
◦ 667 lb
◦ 6667 lb