Erbitux is a colorectal cancer treatment drug that is manufactured by ImClone Sy
ID: 3144566 • Letter: E
Question
Erbitux is a colorectal cancer treatment drug that
is manufactured by ImClone Systems Inc. Assume
treatment takes place over a 1 year period at a cost
of $10,000 per month and the patient lives 5 years
longer than he/she would have lived without the
treatment. How much would that person have to
earn each month beginning 1 month after treatment
ends in order to earn an amount equivalent to
the total treatment cost at an interest rate of 12%
per year compounded monthly?
Provide grafic flow diagram
Explanation / Answer
Total cost of the treatment = $10,000 x 12 = $120,000
Add the interest rate over it for 5 year -
Principal = 120,000
rate = 12% per annum = 1% per month
period = 12 x 5 = 60 months
total due = 120,000 (1+.01)60 = $218,003.60
Monthly earning (60 months) = $218,003.60 / 60 = $3633.39
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