Answered: You lend your sister's daughter $2,000…

You lend your sister's daughter $2,000 for a year, if at the end of the year she pays you $2,180. The interest rate you are charging her is O 1.1%. 9%. 10%. 20%.

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 production function is given by the equation Q = 48L^0.5*K^0.5. Where L is the number of labor…

A: Given Production function: Q=48L0.5K0.5 Q stands for output, L stands for the number of labor…

Q: What is the Present worth of the project? An investment of 5million will yield a revenue of 2.5…

A: Present worth, otherwise called present value or discounted value, is a financial idea used to…

Q: Suppose two parties agree that the expected inflation rate for the next year is 6 percent. Based on…

A: The ex ante real interest rate refers to the expected or anticipated real interest rate on an…

Q: market for paper. Suppose that a paper factory dumps toxic waste into a nearby river, creating a…

A: Externalities: When a firm produces a good sometimes it creates cost or benefits for other firms. If…

Q: A carton packaging manufacturer considers 2 alternative machines in its production process, namely…

A: The price of the automatic machine is Rp. 23 billion with an estimated salvage value of Rp. 4M after…

Q: A commercial 3D printer is purchased for $310,000. The salvage value of the printer decreases by 45%…

A: Equivalent uniform annual cost (EUAC) describes the constant cost over the course of the life of a…

Q: Suppose the following graph shows what prevailed on the foreign exchange market in 2015 with…

A: The value of one currency in another currency's terms is known as the nominal exchange rate. It also…

Q: small open economy is described by the following equations: C = 50 + .75(Y-T) I = 200 - 20r NX =…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first three question for you.…

Q: PLEASE SUBMIT AN IMAGE OF THE REQUESTED ILLUSTRATION DISCUSSED BELOW. (PLEASE MAKE SURE YOU LABEL…

A: In economics and business, there are three key concepts: total cost, fixed cost, and variable cost.…

Q: Adrienne and Stephen consume pizza, Z, and cola, C. Adrienne's utility function is UA = ZACA and…

A: In economics, utility refers to the satisfaction or benefit that an individual derives from…

Q: Figure 30-1 Value of Money 2 1 1 MS1 19 ¹0 MS2 B D Money Demand Quantity of Money Refer to Figure…

A: Financial market economics is a branch of economics that studies financial markets and their…

Q: A country's domestic supply of saving, domestic demand for saving for purposes of capital formation,…

A: The GDP that is saved and then conversely spent in an economy is known as the national savings rate.…

Q: The figure above illustrates a market for gasoline with a $1 tax imposed on the buyers. What is the…

A: Tax incidence refers to the distribution of the burden or impact of a tax between buyers and sellers…

Q: When marginal product is occurs between points A and average product in decreasing average product,…

A: Production refers to the process of creating goods or services through various inputs, such as…

Q: The JSE tracked firmer global peers on Wednesday as anxiety surrounding the global banking sector…

A: In the AD-AS model, the aggregate demand curve represents the total demand for goods and services in…

Q: Please provide answer in typing

A: Social optimum level in economics refer to the point where marginal social cost is equal to margial…

Q: Develop a spreadsheet model to determine how much a person or a couple can afford to spend on a…

A: Total monthly gross income = $6000 Non-mortgage housing expense = $300 Monthly installment debt =…

Q: Refer to the diagram to the right. Initially, the aggregate expenditure curve is given by the…

A: Given Initial aggregate expenditure function AE =400+0.75Y Here 0.75 is the marginal propensity to…

Q: When you consider both of the effects on the slope of the pricing unction (-t/H) from a household…

A: When considering the effects of higher income on the slope of the pricing function (-t/H), it is…

Q: 4. Learning Curves... Learning curves: every time you double production, your costs decrease by 50%.…

A: The additional cost of producing a second unit of a good is known as the marginal cost (MC). Total…

Q: draw an isocost/isoquant diagram for the question.

A: The ideal input mix refers to the blend of resources a company utilizes to achieve a specific output…

Q: Calculate the PPP-adjusted GDP for each of the four countries, using the information found in the…

A: GDP or gross domestic product is the sum of the value of all end commodities produced within the…

Q: suppose there are only two firms that sell Blu-ray players, Movietonia and Videotech. The following…

A: A multistage game steady state equilibrium known as the Nash equilibrium in economics and game…

Q: 2. Monetarism Which of the following is a position held by monetarists? The short-run aggregate…

A: Monetarism emerged during the 1950s and 1960s through the contributions of economists like Milton…

Q: What is the deadweight loss?

A: Price ceiling is defined as the maximum price that the producer can charge for the product. The…

Q: Rafe is optimally choosing to consume 6 apples and 3 bananas. The prices of apples and bananas are…

A: As the first order condition for the utility maximization problem is : MRS = Pa / Pb As, Pa = 7…

Q: a small open economy is described by the following equations: C = 50 + .75(Y-T) I = 200 - 20r NX…

A: DISCLAIMER “Since you have asked multiple questions, we will solve the first three questions for…

Q: Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should…

A: As a rational person and profit maximizer Anh & Santiago would keep on hiring workers as long as…

Q: Which car has a lower EUAC if the owner can earn 5% in his best investment. Contributed by Paul R.…

A: Companies can utilise Equivalent annual Cost (EAC), a useful capital planning technique, to…

Q: 6. Consumer's surplus is the highest in the case c (A) Necessities (B) Comforts (C) Luxuries

A: Consumer surplus is gradually an essential concept in economics, and it is defined as the difference…

Q: What is the Present worth difference of Alternative A and B. Capital investment Annual Cash inflow…

A: For present worth analysis, both alternatives should have equal service life otherwise take the LCM…

Q: Image A is typical of images emphasizing the economic consequences of globalization. Does…

A: ***Since the student has asked to solve a specific part of the question, hence, the expert is…

Q: If you are converting buying power, the buying power in a high index city will be less than the…

A: To calculate the equivalent amount of goods and services in Dallas compared to Boston, we can use…

Q: Thuy Anh runs a small flower shop in the town of Florabunda. She is debating whether she should…

A: As a rational person and profit maximizer Anh would keep on hiring workers as long as MR > MC.…

Q: so do i not draw a supply curve. whats the reasoning for not drawing it.

A: Total factor productivity (TFP) gauges the effectiveness with which an economy utilizes its…

Q: Question 1: Elaborate with an example that how commercial banks create money under fractional-…

A: Under fractional-reserve banking, industrial banks are required to keep best a fraction of the…

Q: Asymmetric information and/or imperfect information can cause two forms of market failure: 1)…

A: The secondhand goods marketplace is a vital element of the larger market dynamics. It includes the…

Q: Due to the high crime rate in the city center, the state council in partnership with the police has…

A: Installation cost=$1000000 Cost for 1st year=500000 Cost for 2nd year=700000 Cost for 3rd…

Q: The domestic market demand and market supply curves for a particular good are described by the…

A: The equilibrium occurs where the demand and supply forces are equal. The tariffs leads to rise in…

Q: a small open economy is described by the following equations: C = 50 + .75(Y-T) I = 200 - 20r NX…

A: Disclaimer- “Since you have asked multiple questions, we will solve the first three questions for…

Q: Determine the present worth of this series of costs: a $45,000 cost in year 1 and annual cost…

A: The lifetime worth of an investment is discounted to the present to get its net present value, or…

Q: à central bank called the Fed, but a major difference is that this economy is closed (and therefore…

A: Aggregate demand is composed of consumption spending, investment, government purchases and net…

Q: Suppose Edison runs a small business that manufactures frying pans. Assume that the market for…

A: Profit maximization refers to the process business firms go through to guarantee the best result and…

Q: 4. In light of the answer in part 2, What is the minimum price at which the firm operates?

A: The firm will continue to operate in the economy upto the point when the Price is greater than the…

Q: Define the term “Production Possibilities.” Explain what each point on the production possibilities…

A: The production possibilities curve (PPC) is a graphical representation of production possibilities.…

Q: What is the Present Worth of Machine A? A firm is considering the purchase of one of two new…

A: Given Initial Cost FC =3400 Service life 3 year Salvage value =100 Operating cost =2000 per year…

Q: The table below shows the daily costs of Cathy's Corn Stand. Cathy sells her corn cobs in a…

A: Marginal Cost: it refers to the change in total cost due to 1 additional unit of production. As due…

Q: Where would you invest your $10,000 to maximize your yield with no foreign exchange risk? in the…

A: Foreign exchange, commonly abbreviated as forex or FX, refers to the decentralized global market…

Q: Assume that the following data describe the condition of the commercial banking system: Total…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: sidering buying a house while he is at university. The house costs $200 000 today. Renting out part…

A: Annual value refers to the estimated yearly rental income that a property is expected to generate.…

Question

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: Calculation:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 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

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.
Imagine that a local water company issued 10,000 ten-year bond at an interest rate of 6. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9. Given the change in interest rates, would you expect to pay more or less than 10,000 for the bond? Calculate what you would actually be willing to pay for this bond.
What is the total amount of interest from a 5,000 loan after three years with a simple interest rate of 6?
Suppose Ford Motor Company issues a five year bond with a face value of 5,000 that pays an annual coupon payment of $150. What is the interest rate Ford is paying on the borrowed funds? Suppose the market interest rate rises from 3 to 4 a year after Ford issues the bonds. Will the value of the bond increase or decrease?
10. Suppose the interest rate is 5% and that you are to receive three annual payments of $10,000, with the first payment one year from now, the second payment two years from now, and the third payment three years from now. What is the present value of this stream of payments?
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?
Suppose you make an annual contribution of $5,000 to your savings account at the end of each year for five years. If your savings account earns 6% interest annually, how much can be withdrawn at the end of five years? (See Figure 2.16.)
Theodore D. Kat is applying to his friendly, neighborhood bank for a mortgage of $200,000. The bank is quoting 6%. He would like to have a 25-year amortization period and wants to make payments monthly. What will Theodore’s payments be? 48 LO3
Consider a bond and a stock. The bond will pay out 100,000 at the end of year five. It will pay nothing at the end of years 1, 2, 3, or 4. The stock is for a corporation that makes profits off a patent. It will pay dividends for the next 25 years, 5,000 dollars at the end of each year. After that, the patent expires and the dividends go to zero. a) Suppose the interest rate is zero. What is the present value of each of these two assets? In other words, if you had to pay now, which is worth more? [Note: This requires calculating “present values”; you can use excel and if needed] b) The Fed’s monetary policy raises the interest rate to 2.5%. Which is worth more? c) The Fed’s monetary policy raises the interest rate to 5%. Which is worth more? d) What is the intuition for the different results in a), b) and c)? e) Do the above results suggest that, by raising the interest rate, the Fed can powerfully affect the price of assets like stocks?
1. Suppose that $100 is invested for five years at an interest rate of 8% per year, compounded annually. How much will be in the account at the end of five years? 2. Suppose that an investor wishes to deposit an amount now so that in 30 years $1,000,000 will be in an account that pays 10% interest per year, compounded annually. What amount must be deposited now? 3. How many years are required for an investment to double in value at 10% interest? 4. Suppose that an investor wishes to deposit an amount now so that in 20 years there will be $50,000 in an account that pays 7% interest, compounded annually. What amount must be deposited now?
1. Suppose that you invest $100. At 3% interest, how long does it take to double your money? To quadruple it?2. Suppose that Anna's college education would cost around $500,000 when they enter college in 15 years. At present, She have $100,000 to invest.What annual interest must she earn on her investment to cover the cost
Q. 3 The future value of an annuity will increase if the interest rate goes up , but the present value of the same annuity will decrease as the interest rate goes up . Select one : O. True O.False