5. Mary Smith can purchase rare gemstones for $2,000 each. She thinks this is a fair price and that the market value of the stones will increase an average of 20 percent per year over the long term. How many stones should she purchase if she wishes her collection to be worth at least $50,000 in five years?

5. Mary Smith can purchase rare gemstones for $2,000 each. She thinks this is a fair price and that the market value of the stones will increase an average of 20 percent per year over the long term. How many stones should she purchase if she wishes her collection to be worth at least $50,000 in five years?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A 12 percent semiannual coupon bond matures in 9 years. The bond has a face value of $1,000 and a current yield (CY) of 11.62 percent. What is the bond’s yield to maturity (YTM)? how would I calculate in a BA II PLUS FINANCIAL CALCULATOR. 4
6. You may borrow or lend at a 5% interest rate, which you expect to remain stable forever. Make a choice and explain your answer in each scenario below. a. You may receive a gift of $500 today or a gift of $540 next year. b. You may receive gift of $100 today or a four-year loan of $500 without interest. c. You may receive a $350 rebate on an $8000 car or one year of no-interest financing on the full price of the car. d. You have just won $1 million in the lottery. You may receive $500,000 now or the full million, paid out in 20 annual payments of $50,000. e. Alternatively, you may take $500,000 now or receive $25,000 per year for eternity (a contract that your heirs will inherit).
Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
Problem 2: You were entitled to receive $5,000 at the end of six months for the rest of your life. If the interest rate is 10% compounded monthly, what is the present value of perpetuity? *Please show your correct and complete solution to the problem. Thank you!
Emily recently graduated with a B.A. in economics and was offered a job with a small but growing company for $40,600 per year. About the same time, Emily inherited $65,000. She decided to pass up the job and use her inheritance to purchase a bubble tea shop rather than put the money into a bond fund (as her uncle suggested), which would have paid 6 percent per year interest. Emily works full-time at her new business, and at the end of the year she had revenues of $77,000 and total explicit costs of $30,000. a. What was Emily's accounting profit or loss for the year? Accounting (Click to select) $ b. What was her economic profit or loss for the year? Economic (Click to select)
Please use a Timeline, a physical one
You need to accumulate $10,000. To do so, you plan to make deposits of $1,450 per year with the first payment being made a year from today - into a bank account that pays 7% annual interest. Your last deposit will be less than $1,450 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Do not round intermediate calculations. Round your answer up to the nearest whole number. _year(s) How large will the last deposit be? Do not round intermediate calculations. Round your answer to the nearest cent. $
Find the present value of $750 to be paid four years from now when the prevailing interest rate is 10 percent, if interest is compounded annually.
Emily recently graduated with a B.A. In economics and was offered a job with a small but growing company for $40,200 per year. About the same time, Emily inherited $60,000. She decided to pass up the job and use her inheritance to purchase a bubble tea shop rather than put the money into a bond fund (as her uncle suggested), which would have paid 5 percent per year interest. Emily works full-time at her new business, and at the end of the year she had revenues of $78,000 and total explicit costs of $38,600. a. What was Emily's accounting profit or loss for the year? Accounting (Click to select) : $ b. What was her economic profit or loss for the year? Economic (Click to select) : $
2.One of life's great lessons is to start early and save all the money you can! If you save $10 today and $10 each and every day thereafter until you are 60 years old(suppose you're 20 years old now, save $3,650 per year), how nuch money will you accumulate if the annual interest rate is 5%?
Which of the following should give you better returns? a. One and a half years rate of interest of 8 percent b. Semi-annual 4 percent rate of interest for 2.5 years c. Quarterly rate of interest of 5% for 2 years