Reference no: EM132080538

The U.S. Mint produces 7.4 billion pennies a year (see www.usmint.gov ). Suppose further that about 5% of the pennies are removed from circulation each year. (They end up in people's jars never to be seen again; I am using U.S. Mint's figures.) Assume that yearly production takes place at the start of any given year and that the 5% are removed at the end of the year. Start your analysis in some year past and tell me how many pennies you th ink are in circulation in U.S. today? [Hint: Start with production of 7.4 in any year (in your lifetime). Then ask what also remains in circulation from the production of the previous year? What about from the year before that? And so on... Go back foreve r; and then add all your terms up. This should generate an infinite geometric series for you.]