A 58-Year-Old Couple Are Considering Opening a Business of Their

question 167

Multiple Choice

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 at time t given by (dollars per year) and the Video Palace has a continuous income stream with a projected annual rate of flow at time t given by (dollars per year) . The initial investment is the same for both businesses, and money is worth 10% compounded continuously. Find the present value of the Video Palace over the next 8 years (until the couple reach age 66) . Round your answer to the nearest dollar. ​

• A) $222,961
• B) $220,268
• C) $202,618
• D) $237,342
• E) $181,863

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Definitions:

Square

A four-sided polygon with all sides of equal length and all angles measuring 90 degrees.

700 Hertz

A frequency of 700 cycles per second, often referenced in acoustics, signaling, or telecommunications.

1000 Hertz

A frequency of sound wave equivalent to 1000 cycles per second, often utilized in audio testing and applications.

Salivation

The secretion of saliva in the mouth, which is triggered by the presence or thought of food, aiding in digestion.