Set up the system fequations and then solve it by using an inverse matrix. One safe investment pays 10% per year, and a more risky investment pays 18% per year. A woman has $147,200 to invest and would like to have an income of $20,000 per year from her investments. How much should she invest at each rate? 10% rate $ 18% rate $
Q: You would like to buy a house that is currently on the market at $85,000, but you cannot afford it…
A: given, present value of house = $85000 inflation rate = 5% able to buy the house after 4 years
Q: Assume that prices for a non-dividend-paying stock follow the lognormal model. The current price of…
A: Introduction: The term Business refers to an exchange of goods and services between the buyer and…
Q: After entering the data shown below in cells B2, B3, B6, and B10, what values should appear in the…
A: Below is the solution:-
Q: A specialized machine essential for a company's operations costs $5,000 and has operating costs of…
A: Calculations:
Q: If there are 6 ways to perform task A and 9 ways to perform task B, then how many ways are there to…
A: If there are 6 ways to perform Task A and 9 ways to perform Task B, then how many ways are there to…
Q: Explain how economic growth affects the valuation of a stock. How are the interest rate, the…
A: "Since you have asked multiple questions we will solve the first question for you. If you want any…
Q: You operate a small wooden toy company making two products: alphabet blocks and wooden trucks. Your…
A: As presumed, Taking 'B' as the number of blocks and 'T' as number of trucks. Given - Profit = For…
Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
A: Below is the solution:-
Q: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the…
A: A budget deficit is a situation when the country’s expenditure increased from its revenue.
Q: Examine formally the following statement about insurance demand. Show that this statements hold…
A: Agent — an individual or association what that's identity is/approved to follow up for another. An…
Q: 3. Imagine that the hazard rate of a company's bankruptcy decreases over time (e.g. because firms…
A: Profit can be explained as the money which is obtained by selling something for more than what it…
Q: As the Quality Sweaters problem is now modeled, if all inputs remain fixed except for the number…
A: Here we consider the model of profit sensitivity to number of mailing, where profit increase…
Q: A building contains 1000 lightbulbs. Each bulb lastsat most five months. The company maintaining…
A: In the above question, the company wants to decide whether the group replacement policy is…
Q: You want to buy a house and your bank is offering you four alternative type of loans. The loans…
A: Given Information:
Q: Your mom will lend you money so long as you agree to pay her back within five years and you offer to…
A: Borrowed amount will be the present value of cash flow at a discount rate of 5%.
Q: iness that where you have frequently observed inefficiencies or lack of capacity. What did you…
A: Government Agencies is of the business where I saw inefficiency and lack of capacity for doing stuff…
Q: If $ 650 is deposited at the end of each quarter into an account paying 11% compounded quarterly,…
A: Compound interest is interest over the interest. It is also called 8th wonder of the world. Human…
Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…
A: In order to answer the questions, we first must emphasize facts about the US economy. Cobb-Douglas…
Q: According to the CAPM, what is the expected risk premium of a stock with a beta of 0.8 if the market…
A: The Capital Asset Pricing Model is used to determine the expected return of security with the help…
Q: What is the maximum profit? What is the value of X? * What is the objective function? (write the…
A: First, let me formulate the linear programming problem, this LP formulation is done below: Here,…
Q: A local finance company quotes a 16 percent interest rate on one-year loans. So, if you borrow…
A: The timeline is: To find the APR and EAR, we need to use the actual cash flows of the loan. In…
Q: Consider a consumer that lives only for two periods. He works in period 1 (and gets income Y1) and…
A: We can say that where current consumption is solely dependent on current income, according to…
Q: Assuming homogenous and independent exposures, the effects of risk pooling arrangements can be…
A: Risk pooling is an arrangement where all risk is shared amongest a group of insurance companies…
Q: You are attempting to establish the utility that your boss assigns to a payoff of $1,200. You have…
A: To find out? The utility function of $1200
Q: You are attempting to establish the utility that your boss assigns to a payoff of $1,500. You have…
A: As per the question Given Information is: Utility of $0 = 0 Utility of $ 10,000 = 1 Here it is given…
Q: A company that manufactures air-operated drain valve assemblies currently has $110,000 available to…
A: given values, Rate = 10% (NPMT) no of periods =5 FV = 0
Q: Discuss the Thaler wine problem with your group, and summarize the discussion and any conclusions in…
A: As per the details mentioned in the question the cost of a bottle was around $20 and it is now…
Q: You are thinking of starting Peaco, which will produce Peakbabies, a product that competes with Ty’s…
A:
Q: In economics, the multiplier effect refers to the fact that when there is an injection of money to…
A: given, $8 billion tax spend = 83%
Q: What is the Divisibility assumption? Give some examples?
A: The Divisibility Assumption is one of the four assumptions of Linear Programming. It states that the…
Q: Investment A woman invests $360,000 in three different mutual funds. One averages 12% per year,and…
A: Let, X1 be the investment on the 1st mutual fund X2 be the investment on the 2nd mutual fund X3 be…
Q: 6. You invest P 5 000 today at an interest rate of 10% for four years, how much would be the future…
A: This question is related to the topic of project management and this topic falls under the…
Q: Which of the following statements is correct for the Black-Scholes model? A) The price of an…
A: A Small Introduction about distribution The term "distribution" refers to the process of spreading…
Q: You are attempting to establish the utility that your boss assigns to a payoff of $2,000. You have…
A: Small Introduction about Payoff Your payback amount is the amount you'll have to pay in order to…
Q: You have been äsked to estimate the probability of default of a manufacturing company, which has…
A: Corporate bonds provide a larger return than other fixed-income investments, but at the cost of…
Q: A salesperson for Fuller Brush has three options: quit,put forth a low-effort level, or put forth a…
A:
Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…
A: Computation of Present Worth Year Cash Flow ($) PV Factor @11% Discounted Cash Flows ($) (A)…
Q: How long will it take $12,000 to grow to $19,000 if the investment earns interest at the rate of…
A: WE WOULD USE THE FORMULA OF COMPOUND INTEREST HERE. IT IS THE INTEREST WHIC IS ADDED OVER PRINCIPAL…
Set up the system
fequations and then solve it by using an inverse matrix.
One safe investment pays 10% per year, and a more risky investment pays 18% per year. A woman has $147,200 to invest and would like to have an income of $20,000 per year from
her investments. How much should she invest at each rate?
10% rate $
18% rate $
Given,
Investment =$1,47,200 and income = $20,000 per year.
Let us assume that,
X= Amount invested at 10%
Y=Amount invested at 18%
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
- In the financial world, there are many types of complex instruments called derivatives that derive their value from the value of an underlying asset. Consider the following simple derivative. A stocks current price is 80 per share. You purchase a derivative whose value to you becomes known a month from now. Specifically, let P be the price of the stock in a month. If P is between 75 and 85, the derivative is worth nothing to you. If P is less than 75, the derivative results in a loss of 100(75-P) dollars to you. (The factor of 100 is because many derivatives involve 100 shares.) If P is greater than 85, the derivative results in a gain of 100(P-85) dollars to you. Assume that the distribution of the change in the stock price from now to a month from now is normally distributed with mean 1 and standard deviation 8. Let EMV be the expected gain/loss from this derivative. It is a weighted average of all the possible losses and gains, weighted by their likelihoods. (Of course, any loss should be expressed as a negative number. For example, a loss of 1500 should be expressed as -1500.) Unfortunately, this is a difficult probability calculation, but EMV can be estimated by an @RISK simulation. Perform this simulation with at least 1000 iterations. What is your best estimate of EMV?The IRR is the discount rate r that makes a project have an NPV of 0. You can find IRR in Excel with the built-in IRR function, using the syntax =IRR(range of cash flows). However, it can be tricky. In fact, if the IRR is not near 10%, this function might not find an answer, and you would get an error message. Then you must try the syntax =IRR(range of cash flows, guess), where guess" is your best guess for the IRR. It is best to try a range of guesses (say, 90% to 100%). Find the IRR of the project described in Problem 34. 34. Consider a project with the following cash flows: year 1, 400; year 2, 200; year 3, 600; year 4, 900; year 5, 1000; year 6, 250; year 7, 230. Assume a discount rate of 15% per year. a. Find the projects NPV if cash flows occur at the ends of the respective years. b. Find the projects NPV if cash flows occur at the beginnings of the respective years. c. Find the projects NPV if cash flows occur at the middles of the respective years.Use logarithms to solve the problem. How long will it take $12,000 to grow to $19,000 if the investment earns interest at the rate of 2%/year compounded monthly? (Round your answer to two decimal places.) yr
- First City Bank pays 8 percent simpleinterest on its savings account balances, whereas Second City Bank pays 8 percentinterest compounded annually. If you made a $5,000 deposit in each bank, howmuch more money would you earn from your Second City Bank account at the endof 10 years?Solve this MCQ : A. For example you need money from outside and that's why you are looking for the best options of external fund which need to be evaluated in terms of: The Length of the Time The Cost The Amount of Company Control Lost All of The Above None of the Above. B. Trust receipts are unique type of which loan (s) an entrepreneur can get through banks. Straight Commercial Loan Inventory Loan Account Receivable Loan All of The Above None of The Above. C. In case of constrained growth business farms actually perform better if they remain at a smaller growth. True False D. Entrepreneurs can get secondary sources of information through Trade Magazines Newspaper Articles Government Agencies All of The Above None of The Above E. The changes between Apple 7+ and Apple 12 Pro is called Breakthrough Innovation Technological Innovation Ordinary Innovation Both Option 2 And 3 None of The Above F. Transfer of interest is not flexible…You are planning to save for retirement over the next 30 years.To do this, you will invest $800 a month in a stock account and $350 a month in abond account. The return of the stock account is expected to be 11 percent, and thebond account will pay 6 percent. When you retire, you will combine your money intoan account with an 8 percent return. How much can you withdraw each month fromyour account assuming a 25-year withdrawal period?
- Integrative Problem Samantha Sampson retired a few years ago at the age of 55. Because she is bored with retirement and still relatively young, Samantha has considered starting a business of her own. However, she doesn’t know anything about business. As a result, Sam has hired the consulting firm for which you work to give her a brief tutorial on business and finance. To begin her lesson, Ms. Sampson has asked you to answer the following questions: What are some of the financial trends that are currently of interest to businesses? What is value, and how is it determined?You are saving for the college education of your two children. They aretwo years apart in age; one will begin college 15 years from today and the otherwill begin 17 years from today. You estimate your children’s college expenses to be$45,000 per year per child, payable at the beginning of each school year. The annualinterest rate is 7.5 percent. How much money must you deposit in an account eachyear to fund your children’s education? Your deposits begin one year from today.You will make your last deposit when your oldest child enters college. Assume fouryears of college.The greater the risk the greater the required ____investment_______ by investors because they can either win big or lose big with great risk. Bond prices move in the opposite direction of ___________ ___________. A dollar __________ is worth more than a dollar in the future. The treasury rate is often consider the ___________ _____________ rate. The time value of money involves computing __________ value of a single amount, __________ value of a single amount, _________ value of an annuity, __________ value of an annuity. _________________ create financial statements and _______________ use them. ___________ is king. In finance, we care about ___________. The balance sheet equation is: _____________ = ________________ + _________________ ____________. You can make a profit on the income statement and still go out of business if you do not have sufficient positive ____________ _____________ coming in. When the Fed adjusts interest rates they are trying to balance _________________ and…
- Using Excel Spreadsheet and formulas for this problem (make sure cell references are unique to your table). Provide all techniques practiced previously: five (5) techniques for Decisions Making under Uncertainty, EMV, EOL, and EVPI. Use α = 0.7 for the Hurwicz. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. Show the work on an Excel file. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000As the Quality Sweaters problem is now modeled, if all inputs remain fixed except for the number mailed, profit will increase indefinitely as the number mailed increases. This hardly seems realistic—the company could becomeinfinitely rich. Discuss realistic ways to modify the model so that this unrealistic behavior is eliminated.Consider a consumer that lives only for two periods. He works in period 1 (and gets income Y1) and moves up the corporate ladder in period 2 (and gets income Y1 < Y2). This consumer has the usual preferences over time: u(C1) + βu(C2) Assume once again that a consumer cannot borrow, but can borrow and immediately sell some MacGuffins, and in the next period, the consumer must buy back the MacGuffins to return to the lender. Assume that MacGuffin t r a d e s a t P1 > 0 in the first period and is expected to trade at P ̃2 in the second period. Write down the new budget constraint. Would a consumer borrow a MacGuffin? What is the condition on the P ̃2? Is P ̃2 a fair price of a MacGuffin? Could the consumer be better off with a MacGuffin?