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7 70 (d) n 0, r 100% 4. Suppose you are a farmer that stores grain in a leaky silo so that you lose 2% of your crop each year as a result of dampness and rot. To obtain the future value of X, you still employ the same formula XHX(1). tt n If r=-2%, what is the value of X,+n as n approaches infinity? That is, what is lim X,(1 +r)2 Will the value of X+n ever equal zero? 5. Upon graduation vou secure iob writh c

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Answer #1

98 100rį = Xt lim,->x(0.98)

As

0.981 limn- (0.98)-0

Thus the limit will tend to zero when n approaches infinity.

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