You have an investment opportunity that costs $35,000 and eight years later pays a lump-sum amount of $100,000. What interest rate per year would be earned on this investment?
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- 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 costExercise 2.3 at pg24: Say you barrowed $10,000 from a bank at 12% interest rate per year for aperiod of 10 years. How much will you have to pay back after 10 years, ifa. The bank charged you simple interest? b. The bank charged you compound interest?Abby lives and works for two periods. In the first period, she earns 1,000 coconuts while inthe second she earns 2,200 coconuts. Abby can save or borrow from a bank at the same interestrate of 10%. Abby also owns a 550 sq.ft. apartment, priced at 2 coconuts per square foot. Shecannot sell it in the first period because she needs a place to stay in the second, but she canborrow against it and sell it in the second.a. In a graph that has future consumption on the vertical axis and current consumption onthe horizontal, show how her lifetime budget constraint would look if banks do NOT requirecollateral. Make sure to compute and show the coordinates of the vertical and horizontalintercepts as well as those of the endowment point (which in the second period shouldinclude her house).b. Suppose that Abby likes to consume 2,400 coconuts in the first period. Could she do thatif banks do not require collateral? Would the outcome be Pareto optimal and why?c. Suppose now that banks do require…
- J Assume that at the beginning of the year, you purchase an investment for $14,200 that pays $95 annual income. Also assume the investment's value has increased to $15,800 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return b. Is the rate of return a positive or a negative number? O Positive O Negative1. 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 costWhat refers to the interest rate at which the present worth of net cash flow of an investment equals to zero? O Return of investment Yield O Economic return Rate of return O Annual worth
- 2.e If $300 is earned in three months on an investment of $12,000,what is the annual rate of simple interest? include a cash flowSuppose that you earn $320 in year 1 and will ean $720 in year 2. If you borrow money against your future income you will have and additional $576 to spend in year 1, and if you lend all of your current income you will have and additional $400 to spend in year 2. In both years you consume only food which costs $1 per kilogram in each year. What is the interest rate that you borrow and lend at? R= Let your MRS for food in year 1 with food in year 2 be given by the formula where F is the amount of food consumed this year and F is the amount of food consumed next year. Calculate your consumption bundle: F = F = Suppose the interest rate at which you can borrow and lend changes to 20%. Calculate your new consumption bundle: F = F2 = Which interest rate is preferred? The initial interest rate found in part 1 O The new interest rate, 20%3. You bought a fully-restored vintage Mustang convertible five years ago for $82,000. Today you have been offered $98,000 for the car. What is the Rate of Return (ROR) on your investment in the car if you sell today?
- 1. Lottie wants to have a fund that would pay annual payments to her son of Php200,000 a year forever. How much does she need to deposit today to achieve her goal if the fund can earn 5 percent interest?2. a What is the annual rate of simple interest if $265 is earned in fourmonths on an investment of $15,000? include a cash flowework (CIT 25) This question addresses the impact of saving on an economy by examining what happens if tax laws change to induce saving and how changes in tax laws can discourage saving. The following graph shows the market for loanable funds. Show the impact of a change in the tax law that successfully encourages saving by shifting either the demand curve (D), the supply curve (S), or both. (?) S INTEREST RATE F2 F3 11 F4 d F5 COL F6 % 。。。。 O F7 A F8 & & F9 * F10 F11 ) F12 2 Fn Lock D Insert Prt Sc + X 1:44 PM 4/29/2022 (2 D Ba
