0 You skipped this question in the previous attempt A multinational engineering

Question

0 You skipped this question in the previous attempt A multinational engineering consulting firm that wants to provide resort accommodations to special clients is considering the purchase of a three-bedroom lodge in upper Montana that will cost $205,000. The property in that area is rapidly appreciating in value because people anxious to get away from urban developments are bidding up the prices If the company spends an average of $325 per month for utilities and the investment increases at a rate of 075% per month how long would t be before the co pry aid ene property for $100,000 more than it has invested in i? 10 points The time it will take is months. 04 3151 Skipped Hine Print Relerences A 30.12,2017 oe o: ip

Explanation / Answer

=how long would it be before the company could sell the property for $100,000 more than it has invested in it? ------it means company wants to make profit of 100,000 over its investment.

let the no.of months be n

then initial investment = 205000

expenditure on utility for 1 month = 325 per month

expenditure on utility for n month = 325n

total expenditure = 205000+325n

since value of investment increases by = 0.75% per month = 205000*(1.0075)1

so in n months value of investment will be = 205000*(1.0075)n

net profit = value of investment - total expenditure

205000*(1.0075)n- 205000-325n = 100000

205000*(1.0075)n-325n = 305000

let n =60 months , then L.H.S. = 301464.61

let n = 62 months, then L.H.S. = 305647.13

using interpolation method

at 60 months = 301464.61

at 62months = 305647.13

at n months = 305000 so,

62-60/ 62-n = (305647.13-301464.61) /( 305647.13-305000 )

2/62-n = 4182.52/647.13

solvin for n we have, n = 61.69055 ~ approximate = 62 months

Ans= time it will take is 62 months

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