Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 99

Solve the following application problem.
A corporation worth $40 million is expected to grow at 8% per year compounded annually for 5 years. (a) Find the future value to the nearest million. __________________ (b) The owners then propose to sell the firm and invest the proceeds in a new venture that should grow at 12% compounded annually for 4 years. Beginning with the future value from part (a) rounded to the nearest million, find the expected future value to the nearest million at the end of 4 additional years. __________________