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A cash flow sequence is described by 1000 + 50k, where k is in years. The sequence extends from year one through year eleven. The interest rate is 8% per year. The value of G is:

a. $50
b. $100
c. $1000
d. $1050

User ARTURIUS
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1 Answer

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Final answer:

In the described cash flow sequence 1000 + 50k, the value of G, representing the annual increase of the cash flow, is a. $50.

Step-by-step explanation:

The cash flow sequence described by 1000 + 50k, where k is the number of years, represents a geometric sequence. The value of G in a geometric sequence is the common difference between consecutive terms.

In this sequence, the cash flow starts at 1000 in the first year and increases by 50 each subsequent year (k).

For k = 1 (year one), the cash flow is $1000 + 50(1) = $1050.

For k = 2 (year two), the cash flow is $1000 + 50(2) = $1100.

The difference between the cash flow from year one to year two is $1100 - $1050 = $50.

Therefore, the value of G is $50, which represents the increase to the cash flow each year.

User Anmol Mittal
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