Question 1: Suppose Mr. Jones of Jones Farms has made a good profit on his soybeans thisand wants to put $50,000 in a savings account to pay for his son's education. The bank pays4.675% compounded annually on money in savings accounts.yearHow much will Mr. Jones have in his savings account in thirteen years if $50,000 is putin the account today?A.

Answered: Image /qna-images/answer/cfa62256-9b57-4f82-bb92-093a29e3cf0c.jpg

Answered: accounts. How much will Mr. Jones have…

accounts. How much will Mr. Jones have in his savings account in thirteen years if $50,000 is put in the account today? A.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter17: Financial Markets

Section: Chapter Questions

Problem 1SCQ: Answer these three questions about early-stage corporate finance: Why do very small companies tend...

See similar textbooks

Related questions

Q: Suppose that there are 177 identical firms in the market, each with a cost function C(q) = 100 + 1.5...

Q: Marginal Profit Cost Total Cost Total Marginal Revenue Revenue $15 $19 $15 $20 2 $15 $23 3 $15 $27 4...

A: Here, the given table provides information about the quantity, price and total cost of a specific fi...

Q: ized. The loss of head due to friction for the 26-inch pipeline will be 67 feet. The energy of the w...

A: The correct answer is given in the second step.

Q: Janet has some money set aside for the purchase of a new house. Her friend, Rachel, has some credit ...

A: Answer: When the difference between the interest rate and the expected inflation rate will be maximu...

Q: point(s) possible The table has data from the nation of Atlantica. Disposable income (trillions of 2...

A: Here, the given data shows the consumption level at different disposable income in the nation of Atl...

Q: Bob wins a lottery and receives $20,000 per year until he retires. As a result, Ke decides to work 3...

A: The income effect is a change in demand for a good or service caused by a change in a consumer's pur...

Q: d) If trade is allowed so that the market price for strawberries is $20/box, calculate producer surp...

A: Since you have posted a multi-part question, I hereby provide you with the solution to parts a, d an...

Q: Suppose Sarah and Julia both work at a bakery making bread and muffins. In an hour, Sarah can either...

A: Here, given information is: Sarah and Julia work for 8 hours. Sarah can either make 10 loaves of br...

Q: Explain how the shape of the production-possibility frontier implies increasing costs for the produc...

A: Points Clothing Food A 16 0 B 15 2 C 13 4 D 10 6 E 6 8 F 0 10

Q: Relate the educational levels in the various categories to the process of industrialization.

A: Meaning of Industrialization: The term industrialization refers to the process of economy empoweri...

Q: 2. Due to pandemic since 2020, many business establishment shutdowns because of insufficient fu...

A: Many business establishment shutdowns that is likely to cause an insufficient funds and it is suppos...

Q: If, for a given percentage decrease in price, quantity supplied decreases by a proportionately small...

A: Elasticity of supply measures the responsiveness of quantity supplied with respect to change in pric...

Q: The first cost of machine is P 1,800,00 with a salvage value of P300,000 at the end of ts life of 5 ...

A: The digits of the years added together Because the capital is most efficient in the early years of i...

Q: Explain how each of the following actions will affect the level of planned investment spending and u...

A: The correct answer is given in the second step.

Q: Holding all other factors constant, the quantity demanded of an asset is: O A. positively related to...

A: The curve that depicts various quantities of goods being demanded by individuals at various levels o...

Q: Who are the forerunners and father of Economics. Explain and discuss their contribution in the field...

A: The greatest economists of the history of mankind or the forerunners of Economics Galileo Galilei t...

Q: 1. A municipal police department has decided to acquire an unnamed drone for aerial surveillance of ...

A: The correct answer is given in the second step.

Q: Which of the following is not one of the Lources of imperfections in the labour mar O The existence ...

A: Labor markets are rarely totally competitive in the real world. Because workers or businesses typica...

Q: When the price level falls A) the slope of the aggregate expenditures curve changes. B) the ...

A: Aggregate expenditure is the sum of consumption, investment, government spending and net exports.

Q: Your student film society is looking for an auditorium to use for an all day Hitchcock film program ...

A: Your student film organization is seeking a venue to host an all-day Hitchcock fest and is willing t...

Q: The costs of tickets and transportation to and from the game, as well as the amount of time the fan ...

A: Here, some information about the game and its related events are given, such as ticket costs, transp...

Q: Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college...

A: PLEASE FIND THE ANSWER BELOW.

Q: If the price of a Spyder drops to $800,000, Instructions: Enter your responses as a whole number. a....

A: Consumer surplus = price that the consumer is willing to pay - price that the consumer actually pays...

Q: Give 5 classifications of demand and give one example for each. (at most 2 sentences)

A: Meaning of Demand and Supply: The term demand refers to the willingness of an individual to purcha...

Q: A company has the head office at Ukraine and a branch at London. The personnel director wanted to kn...

Q: With the help of a demand and supply diagram explain how q video showing worms in sausages will impa...

A: Demand is a very important concept in economics, used to determine the quantity demanded by the cons...

Q: Plant I of XYZ manufacturing organisation employs 5 production and 3 maintenance engineers, another ...

Q: Suppose, at a given point in time, Lynn's Licorice Loft sells licorice in a perfectly competitive ma...

A: Given; Average total cost of producing licorice= $1.20 Average variable cost= $1.00 Marginal cost= $...

Q: Your NGO is considering supporting two independent public sector opportunities. There are sufficient...

A: Investing can be a decent in stock market. The greater part of the Americans they save their abundan...

Q: Trying to figure out question: If a new home can be constructed for $150,000, what is the opportun...

A: Opportunity cost is the cost of opportunity forgotten in order to choose another opportunity. It is ...

Q: Economists use the neoclassical growth model to explain fluctuations in the business cycle because O...

A: The business cycle can be defined as the continuous changes in the phases of the business cycle, the...

Q: Production Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G...

A: Returns to scale can be classified into three categories; 1- Increasing returns to scale (IRS) 2- De...

Q: Fil in the columes with Masasi's free-throw percentage for each garme and his overal free-throw aver...

A: Game Game Result (G) Total (T) Game Free throw percentage (G x 100) Avg Free Throw percentage (T ...

Q: Cost-sharing is used to combat moral hazard at the expense of equity. True False

A: The share of costs covered by your protection that you pay out of your own pocket. This term for the...

Q: Consider the Cobb-Douglas utility function of a consumer is given as u (z y) := 1"y where a > b and ...

A: Given; Utility function; u(x,y)=xaybwhere;a>b and the sum (a, b) and the product (a,b) are 1 and...

Q: Assume that the demand curve is a straight line. If the price per unit of a good rises from $2.40 to...

A: P1 = $2.40 P2=$3.00 Q1 = 250,000 Q2 =200,000 Point Price Elasticity: ep = ∆Q∆P x ...

Q: or all parts of this question, assume that the log of GDP per capita is normally distributed with a ...

A: Given Mean of log GDP per capita =8.7 Standard deviation =1.5 We have to calculate the value of inc...

Q: In 2001, the United Kingdom's economy exported goods worth £192 billion and services worth another £...

A: With the help of given values, the following factors can be calculated: a) The U.K. merchandise trad...

Q: Refer to the figure below. What can we conclude from this figure? Graph of Per Unit Costs What is im...

A: The creation of additional output due to the result of additional input being placed into the compan...

Q: E2

A: The inflation rate is the ratio of percentage change in the consumer price index of the current year...

Q: Jonathan's utility of income is represented by: U(I) = V(311) %3D where I represents annual income. ...

A: Given: U(I)=31I

Q: Which of the following DOES NOT agree with the definition/description of B/C ratio? A. B/C ratio can...

A: The benefit-Cost ratio is used by the government and private organisations to check the viability an...

Q: (b) Given that nothing else is borrowed in the near future, the length of time it will take a govern...

A: A budget deficit means the government expenditure exceeds than government revenue for a product. The...

Q: Production Point Capital (K) Labor (L) Output (Q) A 1 1 2 B 2 2 C 1 3 D 2 4 E 1 5 F 2 6 G...

A: Given information Production table is given Production Point Capital (K) Labor (L) Output (Q) ...

Q: What is Development Planning? Why is there a need for economic development planning?

A: The creation of wealth from which the benefits of the community are being realized is known as econo...

Q: Your full-service brokerage firm charges $140 per stock trade. How much money do you receive after ...

A: Given:Brokerage =$140Number of shares=200 sharesSelling price=$20.13

Q: Would you please explain the reasons why we learn public economics and also mention the main role of...

A: Explain the reasons why we learn public economics The objective of study of public economic aspects ...

Q: .. Two firms compete in price in a market for infinite periods. In this market, there are N consumer...

A: 1 a) In infinite repeated bertrañd game, both the firms will follow Grim trigger strategy: Set P=1...

Q: Twenty people were attacked in London by a disease and only 18 survived. Will you reject the hypothe...

Q: Using the Ms-Md framework, state which curve shifts, in which direction, and what is the effect on t...

A: When expansionary monetary policy is taken then the supply of money increases and the money supply c...

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A mortgage 105m is a loan that a person makes to purchase a house. Table 19.11 provides a list of the mortgage interest rate for several different years and the rate of inflation for each of those years. In which years would it have been better to be a person borrowing money from a bank to buy a home? In which years would it have been better to be a bank lending money?
When do firms receive money from a stock sale in their firm and when do they not receive money?
Answer these three questions about early-stage corporate finance: Why do very small companies tend to raise money from private investors instead of through an IPO? Why do small, young companies often prefer an IPO to borrowing from a bank or issuing bonds? Who has better information about whether a small firm is likely to earn profits, a venture capitalist or a potential bondholder, and why?
Calculate the equity each of these people has in his or her home: Fred just bought a house for 200,000 by putting 10 as a down payment and borrowing the rest from the bank. Freda bought a house for 150,000 in cash, but if she were to sell it now, it would sell for 250,000. Frank bought a house for 100,000. He put 20 down and borrowed the rest from the bank. However, the value of the house has now increased to 160,000 and he has paid off 20,000 of the bank loan.
A corporate bond maturing in 15 years with a coupon rate of 10.9 percent was purchased for $970 and it now selling for $1,000. 1. What will be its selling price in two years if comparable market interest rates drop 4.9 percentage points? (Hint: Use Appendix A-2 and Appendix A-4 or the Garman/Forgue companion website.) Round Present Value of a Single Amount and Present Value of Series of Equal Amounts in intermediate calculations to four decimal places. Round your answer to the nearest cent. $ 2. Calculate the bond's YTM using Equation 14.5 or the Garman/Forgue companion website. Round your answer to two decimal places. %
5. Suppose Alex and Spenser each invest $5,000 in the same stock. Alex invests directly and earns 5% a year. Spenser uses a retirement fund, which charges an administrative fee equal to 0.25% on managed assets, and earns 4.75%.a) At the end of one year, how much will Alex and Spenser have?b) If Alex and Spenser leave their investments in place for 30 years, with annual compounding ofthe interest, how much more will Alex have than Spenser at the end of the 30-year period?
Rework part (f), assuming that Annie holds the bond for 10 years and sells it when the required return is 7.0%. Compare your finding to that in part (f), and comment on the bond's maturity risk. PV= 1,000 N=10 I/Y= 7% Assume that Annie buys the bond at its current price of $983.80 and holds it until maturity. What will her current yield and yield to maturity (YTM) be, assuming annual interest? After evaluating all of the issues raised above, what recommendation would you give Annie with regard to her proposed investment in the Atilier Industries bonds?
d)Assume that all the information given previously is the same and the defaultrisk premium for corporate bonds rated AAA is 1.5 percent, whereas it is4 percent for corporate bonds rated B. Compute the interest rates onAAA- and B-rated corporate bonds with maturities equal to one year, twoyears, three years, four years, five years, 10 years, 20 years, and 30 years.
What is the discount yield, bond equivalent yield, and effective annual return on a $7 million commercial paper issue that currently sells at 98.75 percent of its face value and is 122 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your percentage answers to 3 decimal places. (e.g., 32.161))
Suppose that you are obtaining a personal loan from your uncle in the amount of $20,000 (now) to be repaid in two years to cover some of your college expenses. If your uncle usually earns minimum 8% profit (annually) on his money, which is invested in various sources. 1) What minimum lump-sum payment two years from now would make your uncle happy? 2) If you pay yearly, how much should you pay each year? 3) If you pay every six months, how much should you pay every six months?
13. If Ginger Rayle was offered $4,000 five years from now in return for an investment of $1,000 currently, what annual rate of interest would she earn if she took the offer? 14. When you complete your MBA, you will treat yourself to a new car. The car you want to buy costs $25,000 and you have enough to put 20% down in cash. You can take out a loan for the rest of the cost of the car. Calculate your monthly car payments assuming the auto finance department states that the annual interest rate on the car loan is 8% and you pay the loan over a 3-year period.
Suppose Ted deposits $10,000 in a savings plan earning 5% compounded annually and Tess deposits $10,000 ina savings plan earning 10% compounded annually. Both leave their money on deposit for 40 years. Because Tess’srate is twice as great as Ted’s rate, is it true that Tess will earn twice as much interest? Explain why or why not.Then show calculations to prove your point of view. What is the future value for each investment? N i PV PMT FV 5 10