Question

The present worth of income from an investment that follows an arithmetic gradient is projected to be $475,000. The income in year one is expected to be $25,000. What is the gradient each year through year 6 at an interest rate of 10% per year?

I found this on another site:
475,000 = 25,000(P/A,10%,6) + G(P/G,10%,6)
475,000 = 25,000(4.3553) + G(9.6842)
9.6842G = 366,117.50
G = $37,805.65

Answer 1

Answer:

G = $37,805.65

Explanation:

I found this on another site:

475,000 = 25,000(P/A,10%,6) + G(P/G,10%,6)

475,000 = 25,000(4.3553) + G(9.6842)

9.6842G = 366,117.50

G = $37,805.65

Answer 2

The  gradient each year through at an interest rate of 10% per year is $37,805.65.

What is investment?

Investment refers to the money spend on the acquiring the assets and also to build up the capital for the businessmen and wealth for the individual. It involves saving of the money.

Investment is the collection of the money from other primary source of the income. It also includes profit gains from the investment over a specific period of time.

According to the question,  projected arithmetic gradient is $475,000 and estimated income for one year is $25,000.

Thus, the gradient for each year is calculated as follows:-

475,000 = 25,000(P/A,10%,6) + G(P/G,10%,6)

475,000 = 25,000(4.3553) + G(9.6842)

9.6842G = 366,117.50

Gradient  = $37,805.65

Therefore, it can be concluded that  gradient each year through at an interest rate of 10% per year is $37,805.65.

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