Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to the increase in prices of 12 percent simple interest. What is the present worth of a cell phone? a. P15,621 b. P12,621 c. P13,621 d. P14,621

Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to the increase in prices of 12 percent simple interest. What is the present worth of a cell phone? a. P15,621 b. P12,621 c. P13,621 d. P14,621

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

See similar textbooks

Related questions

Q: Imagine that someone offers you $100 today or $200 in 10 years. You would prefer to take the $100…

A: The formula is given by- F = P *(1+i)^t

Q: Which of the following changes would increase the present value of a future payment? an…

A: Present value- It is the value of a sum of money in the present time. Future payment- The sum of…

Q: Describe how interest could be good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: If Charlie invests $50,000 in a cheese company today and is offered a 5% interest rate. How much…

Q: 4. With an interest rate of 5 percent, the present value of $100 received one year from now is…

A: Present Value = Future Value/(1+r)^N PV = 100/(1+0.05)^1 PV = 95.238

Q: Suppose that the initial equilibrium interest rate is 3%. What is the equilibrium price of a $100…

A: Answer

Q: 7. For each of the following, decide whether you agree or disagree and explain your answer: a.…

A: Investors are the people who invest in different projects of business organization. They invest in…

Q: 6) What is the present value of $500.00 to be paid in two years if the interest rate is 5 percent?

A: The present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: What advantage do you have if you begin investing for retirement at a young age? There is no…

A: The various entities in the economy earn income through different ways, and avenues, and they have…

Q: what is the 4 factor that affects the level of interest rate? and how does each one work?

A: The cost of lending money is represented by an interest rate. On the other hand, it is a reward for…

Q: ou have just won 10 million dollar in the lottery which promises to pay you 1 million dollar every…

A: Given the information: The winning amount of the lottery = 10 million dollar Each year payment = 1…

Q: Explain time and interest rate effect on future value?

A: Interest rate: It is the rate of earning in a specific time period on the investment.

Q: What refers to the interest rate at which the present worth of net cash flow of an investment equals…

A: The rate of return at which the sum of all present values of all the cash flows becomes zero is…

Q: Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What…

A: Bonds are tradable assets that are securitized versions of corporate debt issued by businesses.…

Q: Example [2] & Consider a scenario where you deposited a $1,000 in a savings account that pays $500…

A: PV = 1000 Bank Pays 500 in 3rd Year and 1500 in 5th Year

Q: 1. A consumer, who is initially a lender, remains a lender even after a decline in interest rates.…

A: A decline in rates of interest would tend to make borrowing money cheaper that would encourage…

Q: Suppose a person has a total credit card debt of $1,500$⁢1,500 that has a 7%7% yearly interest rate.…

A: Credit card debt = $1500 yearly interest rate = 7% Saving account balance = $2500 yearly interest =…

Q: Discuss any three factors that determine Interest Rates?

A: Interest rate is the rate at which the money is traded . Money is like a normal goods an interest…

Q: At 5% interest rate, how much should you invest today to be able to withdraw ₱ 3,199 annually for 7…

A: The value of money refers to the number of goods and services one can buy using it. It is calculated…

Q: Describe what is Market interest rate?

A: The rate of interest which is determined by the interaction of demand for and supply of funds in the…

Q: If a company will pay $100,000 for a truck that will increase deliveries to be made, giving an…

A: Consider the given information below to answer the questions: The companies make use of the net…

Q: You buy a 10-year bond with a 3% coupon. The market interest rate is 2%. If the market interest rate…

A: Claiming a bond is basically similar to having a surge of future money instalments. Those money…

Q: Suppose the economy moves into recession and there is general pessimism about the future economic…

A: A Fall in the GDP for consecutive two quarter is known as the recession. The aggregate demand…

Q: At what rate of interest compounded annually will an investment double in five years? Find the…

A: The formulae for compounding is A=P(1+r)t A: Accumulated wealth P: Principle payment r: Annual…

Q: Why do we use the present value of an asset or investment as basis for its value?

A: Present Value:- Amounts of money presently are valued higher than the same quantity in the future,…

Q: Why interest rates differ at any given time a range of interest rates prevails in the economy. what…

A: The money market equilibrium is determined where money demand is the money supply. It helps in…

Q: QUESTION 1 Muhammad takes out a loan of $ 4,324, at 8% simple interest, for 9 years. How much will…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the meaning of Net Present Worth?

A: The net present worth also known as the net present value calculated the difference between the…

Q: According to the Housing Affordability Index (HAI) is it a good time to buy a home in New Jersey?…

A: Median Housing Price in NJ (MEDPRICE)= $500,628 Interest Rate (i) 3.5% compounded monthly = 0.035…

Q: A star baseball player signs a contract that would pay a total of $16 million. The player receives…

A: Present value is the current worth of a cash flow at a certain rate of interest and period of time.

Q: c. Which of the following situations in c (i) & c (ii) represent investment? Saving? Explain (i)…

A: Saving: This defines that when a person's income exceeds his consumption is called savings which…

Q: 6) With an interest rate of 8 percent, the present value of $100 received one year from now is…

A: Given information, Future value (FV): $100 (one year from now) Interest rate (r): 8% Time period…

Q: Exercise 2.3 at pg24: Say you barrowed $10,000 from a bank at 12% interest rate per year for a…

A: a)10,000*10=1,00,000 Interest 12% 1200*10=12,000 Therefore 1,00,000+12,000=1,12,000

Q: Suppose that the interest rate is 5 percent. Enter your answers rounded to 2 decimal places. A.…

A: Future vale refers to the amount today that will be worth at a certain point in the future

Q: Ellah buys a discount bond for $920. When the bond matures, she redeems it for its face value of…

A: Buying price of bond = $920 Future value = $1000

Q: A star baseball player signs a contract that would pay a total of $16 million. The player receives…

A: Present value of annuity of contract is calculated as follows. Present value of an annuity=…

Q: Which of the following would both make the interest rate on a bond higher than otherwise? a.…

A: Bonds are defined as long term debt which is exclusively been provided by the company to generate…

Q: discuss the relationship between the coupon rate, the market rate of interest and the price of bond

A: The bond stated interest rate will not change the market interest rate will be constantly changing…

Q: a) You hold a consol that pays a coupon C in perpetuity. The current interest rate is i, and the…

A: Given: Consol that pays a coupon (C) in the perpetuity The current interest rate is: i The…

Question

Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to the increase in prices of 12 percent simple interest. What is the present worth of a cell phone?

a. P15,621

b. P12,621

c. P13,621

d. P14,621

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

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

The interest rate is 6 percent a year and you expect to receive $1,000 next year and the following year. What is present value of $1,000 to be received in two years? The present value of $1,000 to be received in two years is $____ Answer to 2 decimal places Thanks!
Jack’s Lock and Key are considering remodeling. It estimates that the remodeling will cost $6,000 and that as a result revenues will rise by $3,000 the first year, $2,500 the second year, $1,500 the third year, and have no effect after then. If the interest rate is 5%, should Jack’s remodel? Defend your answer by showing your work.
You are offered an investment that will pay you GH¢ 200 in one year, GH¢ 400 the next year, GH¢ 600 the next year and GH¢ 800 at the end of the next year. You can earn 12 percent on very similar investments. What is the most you should pay for this one?
Assuming a mix of present and future consumption is preferred, ANY consumer who starts at point A will gain utility from a rise in interest rates. is it true or false
Q) A star baseball player signs a contract that would pay a total of $16 million. The player receives $4 million upon signing, and $3 million every year for the next four years. (In other words, the player will receive $4 million today, $3 million in a year from today, etc.)At an interest rate of 4 percent, the sum of the present value of the contract is $__. Your answer should be a whole number. If the contract is spread over fewer years, the present value of the contract would __________ (options: increase or decrease)
Consider that you were given a US savings bond that will pay $100 when it matures in ten years. What happens if the interest rate rises to the present value of this bond payment?Why happens if the interest rate rises to the present value of this bond payment? A. Increases in present value B. The current value is unaffected. C. A decrease in present value
Suppose that Tyler wants to buy a house and is thinking of using $20,000 that sits in a retirement account for a down payment on this new home. Using the $20,000 as a down payment will reduce Tyler's income when he retires in 30 years. If Tyler can earn an 8%8% annual return on his money if he leaves it in the retirement account, how much will his consumption in retirement be reduced if he uses this money for a down payment now?
Higher interest rates are likely to Group of answer choices decrease consumer spending and increase consumer saving. have no effect on consumer spending or saving. increase consumer spending and decrease consumer saving. decrease both consumer spending and consumer saving.
Consider a $1200 bond that makes $30 annual coupon payments. If the interest rate is 2 percent and the bond matures in two years, what is the bond's present value? Carefully follow all mathematical instructions. Round intermediate steps to four decimal places and your final answer to two decimal places.
investment A promises to pay £500,000 profit at the end of the first year, £550,000 at the end of two years, £600,000 at the end of three years, and £625,000 at the end of four years. Investment B promises to pay £25,000 profit at the end of the first year, £100,000 at the end of two years, £600,000 at the end of the third year, and £1,000,000 at the end of four years. Assume that nine percent per year is an appropriate discount rate for each investment. Also, assume a zero-scrap value for each investment at the end of four years. Determine which investment promises to be the better of the two for the company
Erin buys a bond that pays no coupon payments for $160. When the bond matures, she receives $200. Erin earned an interest rate of ____________ percent on this bond. (Enter your answer "as a percent, but without the percentage sign." If you think Erin earned 99.99 percent interest, enter only 99.99 in the blank.)
Hi! Can you help me with the question below? Matt has the choice between receiving $100 now or receiving $140 in two years. Which of the following statements is true? A) If the interest rate is 20% he should take the $100 now.B) If the interest rate is 10% he should take the $100 now.C) He should not take the $100 now if the interest rate is anything below 20%.D) None of the above.