Income from the sale of application software (apps) is usually constant for several years and then decreases quite rapidly as the market gets close to saturation

Economics Aug 24, 2020

Income from the sale of application software (apps) is usually constant for several years and then decreases quite rapidly as the market gets close to saturation. Income from one smart phone app was $38,000 in years 1 through 4 and then decreased geometrically by 9% per year through year 9. Determine the equivalent annual income in years 1 through 9, using an interest rate of 4% per year.

Expert Solution

Equivalent annual income = $33,447

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