EXAMPLE 34.14 : For a formula of y = [ 1 - 1 / (1 + r) ^ n ] / r, let y = presen

EXAMPLE 34.14 : For a formula of y = [ 1 - 1 / (1 + r) ^ n ] / r, let y = present value, r = interest rate / year, n = number of years to future value of 1 : (a) Find a simple mathematical relationship of y as a function of r when n = 1 million years. (b) What is the present value of $10000, if the annual discount rate is 10 %, forever?

Question Posted / kangchuentat

1 Answers
2024 Views
I also Faced
E-Mail Answers

EXAMPLE 34.14 : For a formula of y = [ 1 - 1 / (1 + r) ^ n ] / r, let y = present value, r = interes..

Answer / kangchuentat

(a) When n = 1 million years, it could be approximated as n = infinity. Then y = [ 1 - 1 / (1 + r) ^ n ] / r = [ 1 - 1 / (1 + r) ^ (infinity) ] / r = [ 1 - 1 / (infinity) ] / r = (1 - 0) / r = 1 / r. (b) For future value of $10000 and n = infinity forever, use the equation of y = 1 / r for future value of 1 and interest rate r. As r = 10 % = 0.1, then y = x / r = $10000 / 0.1 = $100000, where x = future value. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.

Is This Answer Correct ?

0 Yes

0 No

Post New Answer

More Chemical Engineering Interview Questions

testing formula for oxygen by ammonium chloride,ammonium hydroxide and copper

0 Answers

How do you design a vapor-liquid separator or a flash drum?

0 Answers

What is the reason for removing silicon from aluminum?

3 Answers IOCL, ONGC,

Please convert 1 kg (mass) of Liquid LPG into Ltrs (volume) of LPG Vapor.

2 Answers Wak gas,

For what ration of Lengh/Dia. of tank (Jacketed tank), maximum heat transfer area is available?

0 Answers

Suppose you have hot oil and cold water, what kind fluid you flow In shell side and tube side and why?

5 Answers

What is the purpose of capacitor?

0 Answers

Why methanol like petroleum compounds are stored in underground storage tanks?

2 Answers MPCL, NFIL, Reliance, UPL,

What is chemicals?

1 Answers Thirumalai Chemicals,

The water is superheated steam at 440 degree Celsius and 17.32 megapascals. Estimate the enthalpy of the steam above. From the steam table for water at 440 degree Celsius, enthalpy of steam, h at 18 megapascals is 3103.7 kilojoules per kilogram and at 16 megapascal is 3062.8 kilojoules per kilogram. Assume that h = mP c where P is pressure; m and c are constants at fixed temperature with small differences in P.

1 Answers

How can you determine the proper pipe thickness for a slurry line?

0 Answers

how much maximum power can be generated by 320v, 10kg-cm synchronus motor if shaft is roteted mechanically at 50 to 60 rpm?

0 Answers

For more Chemical Engineering Interview Questions Click Here