Capital value find the capital value of an asset that generates $7200 yearly income if the interest rate is as follows.
a. 5% compounded continuously
b. 10% compounded continuously

a. An asset that generates $7200 yearly income if the interest rate 5% compounded continuously, then its capital value is $140433.002

b. An asset that generates $7200 yearly income if the interest rate 10% compounded continuously, then its capital value is $68460.59

Step-by-step explanation:

For continuously compound interest

                     ---------------> eq.1

Where

P = principal amount (initial investment)

r = annual interest rate (as a decimal)

t = number of years

A = amount after time t.

Let’s solve the equation

Where,

P is unknown

                     A = P + 7200 (asset after 1 year) ---------------> eq. 2

Case A:

t = 1 (1 year)

Substitute all values in the formula (2) using the formula (1),

Case B:

t = 1 (1 year)

Substitute all values in the formula (2) using the formula (1),

this answer is !

answer:   35 % is the probability of a late departure or an early arrival.

step-by-step explanation:

let l represents the late departure and e represents the early departure.

then, according to the question,

p(l) = 12 %,   p(e) = 27 % and = 4 %

and, we have to find out,

but, we know that,

which is the required equation that will use to find the probability of a late departure or an early departure.

therefore,   the probability of a late departure or an early arrival =   35 %