Answered: cigarette vendor borrowed P2,000 and…

Business

Economics

cigarette vendor borrowed P2,000 and agreed to pay P3,000 after 25 days. What is the simple interest rate per annum?

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 6SCQ: What is the total amount of interest from a 5,000 loan after three years with a simple interest rate...

See similar textbooks

Related questions

Q: a. The present value of $25,000 each year for 4 years at a / percent interest rate b. The present…

A: The formula for calculating the Future Value is: FV= PV(1+r)nwhere,FV= Future ValuePV= Present…

Q: Suppose that the interest rate at which Joanne can borrow and lend is 10 percent per year, but she…

A: Future value is basically the value of a current asset at a future date based on a projected rate of…

Q: 1. Let r, s > 0 be interest rates. Below is a calendar of May 2022 which describes an interest rate…

A: * SOLUTION :- (1)

Q: (M/P) d=Y-20r. M = 600. P = 2. 1. What are the equilibrium level of income and the equilibrium…

A: The equilibrium level of income is the point at which a business is able to sell all of the goods it…

Q: makes rental payments of $1,200 per month and wants to know the present value of their annual…

A: * SOLUTION :- * 3) The monthly payment is computed as shown below: * Present value = Monthly…

Q: Dr. Rubin has $10,000 to invest for three years. Two banks offer a 2 percent interest rate, but bank…

A: Given: Amount=$10000 Interest rate=2%

Q: Question 4 The equivalent rate of interest for a discount rate of 10.5% for 60 days is 104.9825%.…

A: The relationship between discount rate and interest rate is as follows: r=d1-dt where, d is the…

Q: 3. Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an…

A: Coupon bonds are the bonds yielding a fixed amount of annual payments (also called coupons ) until…

Q: How long does it take to become a millionaire? A $500,000 investment will hit $1 million in 42 years…

Q: If we express money flows in current dollars ($A), the interest rate to use to determine present…

A: If the money flows are expressed in current dollars term, the present value in economic analysis is…

Q: ADVANCED ANALYSIS To fund its wars against Napoleon, the British government sold consol bonds. These…

A: A perpetual bond , also called consol bond signifies a bond who yields a fixed amount of income for…

Q: If an interest rate pays 9% five times a year, calculate the effective rate of interest. please with…

A: Interest rate is the interest charged to the borrower by the person who makes the loan, calculated…

Q: Suppose Crystal Wilson wants to accumulate $1,000,000 by the time she retires in 40 years. If she…

A: Given, FV = $1,000,000 Time = 40 years Rate of interest = 10%

Q: What are the factors affecting the amount of money paid for the use of borrowed capital or the…

A: - Hello. Since your question has multiple parts, we will solve the first question for you. If you…

Q: 5. How much is the interest rate on a bond that has a face value of $1,000, a selling price of $800,…

A: here we calculate the interest rate of bond which are as follow --

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: Question 3 (2 marks): The Cash Grab Credit Card Company charges a nominal 28 percent interest on…

A: Answer: Given that: The cash Grab Credit card Company charges a nominal 28 percent interest on…

Q: Using 12 percent simple interest per year, how much interest will be owed on a loan of $500 at the…

A: The formula for finding simple interest is PNR/100 P= principal amount N = number of years or time…

Q: Define each of the following loan terms, and explain how they are related to one another: the prime…

A: Loan: It refers to the money that people takes from banks or from friends and relatives. The more…

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: 4. A P4,000 is borrowed for 75 days at 16% per annum simple interest. How much will be due at th e…

A: Simple interest is a quick and easy method of calculating the interest charge on a loan. Simple…

Q: You decide to lend your sister, who has never defaulted on a loan (ie. ρd =0), $1000 for one year.…

A: At the end of the year she gets $1050 (which includes the loan). Loan given to sister was of $1000.…

Q: 2. On May 11, 1993, a note due on January 10, 1994 was discounted at 12.12% simple discount. Find…

A: Definition: a discount rate is a pace of getting used to limit future incomes once again to their…

Q: What could cause a drop in interest rates? the supply curve for loanable funds shifting left, or the…

A: In an economy, the changes in interest rate depends upon the demand or supply of loanable funds in…

Q: The premier rate, the rate on corporate paper, the simple interest rate on a bank loan requiring…

A: Introductions, Loan:- It alludes to the cash that people borrow from friends, family, or banks.The…

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: If Reybien got a character loan of P10,000 from a bank with 18 percent interest per annum, how much…

A: The principal amount is given which is 10,000. We are required to find out the amount of interest…

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: Given demand and supply for loanable fund Market at given time period in the table below Real…

A: Given Interest rate Quantity of loanable fund demanded (billion $) Quantity of loanable fund…

Q: 1. Calculate the following questions with an interest rate of 11% per year, calculate the following…

A: The present value of money indicates that the amount of money today is more valuable than the same…

Q: Economics What is the interest rate in% that makes the following cash flows (A = B) economically…

A: We are going to calculate present worth for each cash flow. Present worth of Future Cash flows for…

Q: me the interest rate is 7%, What is the present value of $200: 1 year from now? 186.92 5 years from…

A: We need to find the present value of $200So, FV = $200Interest rate, r = 7% = 0.071. The present…

Q: Question 4 The equivalent rate of interest for a discount rate of 10.5% for 60 days is 104.9825%.…

A: The relationship between discount rate and interest rate is as follows: r=d1-dt where, d is the…

Q: 1. Let r, s > 0 be interest rates. Below is a calendar of May 2022 which describes an interest rate…

A: * SOLUTION :- Given that ,

Q: Suppose that you eam $250 in year 1 and will eam $448 in year 2. If you borrow mòney against your…

A: Given information: Earning in Year 1 = $250Earning in Year 2 = $448 If money is borrowed against…

Q: Calculate what you would actually be willing to pay for this bond.

A: The current value of a future sum of money at a given rate of return is called the present value.…

Q: What is the present value of $100 one year from now if the interest rate is 10%? What is the present…

A: Interest rate: It refers to the rate at which the debtor has to pay the amount with the interest…

Q: what is the present value of a loan when a monthly payment of ₱3,250 is needed to extinguish for 3.5…

A: Present Value gives the value of a series of cash flows when it has been discounted with the current…

Q: 3.34 (LG 3.5) Gail has won a lottery that pays her $100 000 at the end of this year, $110 000 at the…

A: Present value is a concept that states that the value of money today is more valuable than the same…

Q: a. What is the future value of $500 four years from now if the interest rate is 5 percent? %24 ok b.…

A: Let's we have concider given data, Investment ammount( P) =$500 Farmula of calulation of future…

Q: Joyce buys a television set from a merchant who asks P 18,750 at the end of 60 days (cash in 60…

A: Given information: Future value: P18,750 Time period: 0.167~ 2 months (approx) Interest rate: 8%…

Q: What is capital recovery? A.The income recognized from insurance proceeds received after a capital…

A: Capital Recovery: Whenever the investment is made in assets or in a company then initially it earns…

Question

1. A cigarette vendor borrowed P2,000 and agreed to pay P3,000 after 25 days. What is the simple interest rate per annum?

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

What is the total amount of interest from a 5,000 loan after three years with a simple interest rate of 6?
H6. a. what is the present value of a two year income stream $10,000 in year 1 and $10,000 in year 2 assuming a 5% interest rate (assuming one gets paid at the end of the year) b. what is the present value of a $10,000 income stream obtained in every throughout one's life?
Consider a 25-year loan with an annual interest rate of 7 percent and monthly payments of $1,201.53. The discount points charged by the lender at origination are 3 percent and the cost of borrower title insurance and mortgage insurance are, respectively, 0.5 percent and 2.0 percent of the loan amount. Additional fees paid to other third parties (i.e., not the lender) will equal $4,000. What is the loan amount? What is the lender’s yield/IRR? What is the effective borrowing cost (EBC)? USE EXCEL
What is the present value of $1.21 received at the end of two years if the interest rate is 10% and compounding is annual? a- 1.31 b- 1.21 c- 1.10 d- 1.00 Which of the following is a leading economic indicator? a- average prime interest rate charged by banks b- stock prices, 500 common stocks c- commercial and industrial loans outstanding d- industrial production
Compare the interest earned by $15,000 forten years at 8% simple interest with that earned bythe same amount for ten years at 8% compoundedannually.
In 1915, Albert Epstein allegedly borrowed $7,000 from a large New York bank on the condition that he would repay 7% of the loan every three months, until a total of 50 payments had been made. At the time of the 50th payment, the $7,000 loan would be completely repaid. Albert computed his annual interest rate to be [0.07($7,000) × 4]/$7,000 = 0.28 (28%). Solve, (a) What true effective annual interest rate did Albert pay? (b) What, if anything, was wrong with his calculation?
SHOW SOLUTIONS AND WRITE NEATLY THE FORMULA COMPOUND INTEREST What nominal rate compunded monthly will yiled an effective interest rate of 5.78% in 2 decimal places. INPUT the % sign
Melissa agrees to contribute $500 to the alumni fund at the end of each year for the next 4 years. Shannon wants to match Melissa's gift, but he wants to make a lump-sum contribution. If the current interest rate is 2.5% compounded annually, how much should Shannon cortribute to equal Melissa's gift? (Round your answer to the nearest cent.)
6. Alex invested a certain amount to a business and promised to pay him back with 1.8 times his original investment. They agreed to have it compounded monthly within 9 years. What is the nominal rate of interest r in percent?
Find the spot rate for a theoretical 2 year zero coupon bond using the following information: 6 month T-bill rate = .5% 1 year T-Bill rate = .75% 1.5-year T-Note rate = 1.10% 2-year T-Note rate = 1.65%
4. Joyce buys a television set from a merchant who asks P 18,750 at the end of 60 days (cash in 60 days). Joyce wishes to pay immediately and the merchant offers to compute the cash price on the assumption that money is worth 8% simple interest. What is the cash price today?