The unit price of personal computers, measured in constant dollars, is expected to decrease at an annual rate of 10%. However, the number of microcomputers purchased by the company is expected to increase over a5-year period at an annual rate of 30%. The unit price of a personal computer is currently $2,000. This year the company will purchase 100 microcomputers at the current price. Using a real interest rate of 8% and an inflation rate of 6%, determine the following: a. The yearly expenditures for personal computers over the 5-year period, measured in constant-worth dollars. b. The yearly expenditures for personal computers over the 5-year period, measured in then-current dollars. c. The single sum equivalent at the end of the current year of the expenditures on microcomputers over the 5-year period, measured in current dollars. d. The future worth equivalent of the expenditures on microcomputers at the end of the 5-year period, measured in then-current dollars.
The unit price of personal computers, measured in constant dollars, is expected to decrease at an annual rate of 10%. However, the number of microcomputers purchased by the company is expected to increase over a
5-year period at an annual rate of 30%. The unit price of a personal computer is currently $2,000. This year the company will purchase 100 microcomputers at the current price. Using a real interest rate of 8% and an inflation rate of 6%, determine the following: a. The yearly expenditures for personal computers over the 5-year period, measured in constant-worth dollars. b. The yearly expenditures for personal computers over the 5-year period, measured in then-current dollars. c. The single sum equivalent at the end of the current year of the expenditures on microcomputers over the 5-year period, measured in current dollars. d. The future worth equivalent of the expenditures on microcomputers at the end of the 5-year period, measured in then-current dollars.
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