An individual decides to reduce their expected consumption next year by 1 unit and, in return, increases their current consumption by 0.91 units. What is the real rate of interest? (a) 7.5% (b) 8.5% (c) 9.9% (d) 10.0%
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- what;s the present value of perpetuity that pays % 1, 563 per year if the appropriate interest rate is 6.8% ?What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b) 9.6 percent rate? Explain why the present value is lower when the interest rate is higher?Assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assume the investment's value has decreased to $6,800 by the end of the year. (a) What is the rate of return for this investment? (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 negative number? Positive O Negative
- If $16800 is deposited in a savings account today, what amount will be available three years from today? The following future value interest factors are provided: Periods Future Value of 1 at 12% 1 2 3 5 1.120 1.254 1.405 1.574 1.762 O ($16800 x 1.120) + ($16800 x 1.254) + ($16800 x 1.405) O $16800+ 1.405 $16800 x 1.405 O $16800 × 1.120 x 3If $476 invested today yields $500 in one year's time, what is the discount rate?(a) Find the present and future value of an income stream of $6000 per year for a period of 10 years if the interest rate, compounded continuously, is 2%. Round your answers to two decimal places. Present value = $ Future value $ (b) How much of the future value is from the income stream? How much is from interest? Round your answers to two decimal places. The amount from the income stream is $ The amount from the interest is $
- A perpetuity pays $250 per year and interest rates are 7.0 percent. How much would its value change if interest rates increased to 8.5 percent? (Round your answer to 2 decimal places.) Change in value Did the value increase or decrease? decrease O increaseAssume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 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.If the rate of interest (r) is 9%, then you should be indifferent about receiving $9,500 in one year or ________.
- A savings account’s value today is $150 and it earns interest at 1% per month. How much will be in the account one year from today? Which of the following is correct to solve for the unknown value? (a) P = 150(1 + 0.01) 12 (b) 150 = F(F/P, 12%, 1) (c) F = 150(1.12) −12 (d) F = 150(F/P, 1%, 12help this finalSolve this Accounting question

