Ask Question
21 October, 06:38

e Department of Traffic Security of a city is considering the purchase of a new drone for aerial surveillance of traffic on its most congested streets. A similar purchase 4 years ago cost $950,000. At an interest rate of 7% per year, what is the equivalent value today of the previous $950,000 expenditure?

+1
Answers (1)
  1. 21 October, 07:34
    0
    The equivalent value of the expenditure today is = $1,245,256.21

    Explanation:

    The equivalent today of the 950,000 would be the future value compounded at 7% per year.

    FV = PV * (1+r) ^n

    FV - ?, PV - value 4 years ago, n - number of years, r - rate of return

    PV - 950,000, n - 4, r-7%

    FV = 950,000 * (1.07^4) = 1,245,256.21

    The equivalent value of the expenditure today is = $1,245,256.21
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “e Department of Traffic Security of a city is considering the purchase of a new drone for aerial surveillance of traffic on its most ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers