The optical products division of Panasonic is planning a $3.5 million building expansion for manufacturing its powerful Lumix DMC digital zoom camera. If the company uses an interest rate of 20% per year compounded quarterly for all new investments, what is the uniform amount of revenue per quarter the company must realize to recover its investment in 3 years?

The correct answer is $394,891.

Explanation:

According to the scenario, the given data are as follows:

Future value (FV) = $3,500,000

Time period = 3 years

Time period (quarterly) (t) = 12

Interest rate = 20% annually

Interest rate ( quarterly) (r) = 5% = 0.05

So, we can calculate the present value by using following formula:

FV = P()

$3,500,000 = P ( )

So, after solving it we get,

P = $394,891

Hence, the uniform amount of revenue per quarter the company must realize to recover its investment is $394,891.

15 1/2 years old in california

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