# Asset Value in "t" years

Suppose the value of assets (in thousands of RM) of company Rainbow after t years is given by .

Find

(i) the initial value of the assets.

(ii) the value of the assets after 5 years,

(iii) the profit if the owner sells the assets after 8 years.

### Comments for Asset Value in "t" years

 Jul 25, 2012 Asset Value in t years by: Staff The answer: The function in the first line of the problem statement did not display. If you would like to resend it as an attachment, please do so. You can also send it as an image. I don’t know what kind of assets company Rainbow has: savings accounts, bonds, stocks, land, machines, patents, customer goodwill, etc. Each of these assets will behave differently over the long run. For example, machines depreciate, patents and land could gain in value, etc. Because of there is no information in the problem statement, I’m going to assume we can use the following formula for the sake of argument: A = P*(1 + r)^t A = final balance in an interest bearing account P = principle (the initial deposit in the bank, or the Present Value of the Investment) r = decimal form of interest rate for each period of time (annual) t = number of years (i) the initial value of the assets. The initial value of the assets is “P” (ii) the value of the assets after 5 years, The value of the assets after 5 years = A T = 5 A₅ = P*(1 + r)⁵ (iii) the profit if the owner sells the assets after 8 years. Profit if the assets are sold assets after 8 years = A₈ - A₀ Profit = A₈ - A₀ Profit = P*(1 + r)⁸ - P*(1 + r)⁰ Profit = P*(1 + r)⁸ - P*1 Profit = P*(1 + r)⁸ - P Profit = P*[(1 + r)⁸ - 1] Thanks for writing. Staff www.solving-math-problems.com