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Improper Integrals and Present Value Calculations

1. The document contains 7 math problems involving evaluating improper integrals, determining present values of investments generating continuous cash flows, and calculating the long run number of patients receiving treatment at a clinic. 2. Problem 5 asks to determine the present value of an investment generating $2400 per year in perpetuity with a 4% annual interest rate compounded continuously. 3. Problem 6 asks to determine the present value of a franchise that will generate profits of $12,000 + $900t per year with a 5% annual interest rate compounded continuously.

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Fatima Nadeem
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17 views4 pages

Improper Integrals and Present Value Calculations

1. The document contains 7 math problems involving evaluating improper integrals, determining present values of investments generating continuous cash flows, and calculating the long run number of patients receiving treatment at a clinic. 2. Problem 5 asks to determine the present value of an investment generating $2400 per year in perpetuity with a 4% annual interest rate compounded continuously. 3. Problem 6 asks to determine the present value of a franchise that will generate profits of $12,000 + $900t per year with a 5% annual interest rate compounded continuously.

Uploaded by

Fatima Nadeem
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Lahore School of Economics Summer 2012 Math III Sehrish Ejaz Assignment # 8 Problem 6.

Evaluate the given improper integral or show that it diverges. 1. (1/x3) dx (upper limit: +, lower limit: 1)

2. [ 1/ (2x-1)2 ]dx

(upper limit: +, lower limit: 3)

3. [e- (x)^ / (x)] dx

(upper limit: +, lower limit: 1)

4. [1/ (xlnx)] dx

(upper limit: +, lower limit: 2)

5. An investment will generate $2400 per year in perpetuity. If the money is dispensed continuously throughout the year and the if the prevailing annual interest rate remains fixed at 4% compounded continuously, what is the present value of the investment?

6. The management of a national chain of fast food outlet is selling a permanent franchise in Seattle, Washington. Past experience in similar localities suggest that t years from now, the franchise will be generating profit at the rate of f(t)= 12000+ 900t dollars per year. If the prevailing interest rate remains fixed at 5% compounded continuously, what is the present value of the franchise?

7. The fraction of patients who will still be receiving treatment at a certain health clinic t months after their initial visit is f(t)=e-t/20. If the clinic accepts new patients at the rate of 10 per month, approximately how many patients will be receiving treatment at the clinic in the long run?

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