Today two economies have the same size (e.g., $1B). The growth rate for the first one is 3% and for the second, 6%. How many times the second economy will be larger than the first in 100 years? 17.65, 2, 10.32, 6.89

Today two economies have the same size (e.g., $1B). The growth rate for the first one is 3% and for the second, 6%. How many times the second economy will be larger than the first in 100 years? 17.65, 2, 10.32, 6.89

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Suppose that $1000 is invested now, $2000 is invest two years from now, and $3000 is invested four…

A: Calculate the future value as follows:

Q: The value of business, currently priced at 100000 Rial, is expected to increase by 20% a year.…

A: Given information: Current Price : 100,000 Rial Increase every year : 20%

Q: Revenue from a project is expected to be $7000 per year in real terms (i.e. an identical project…

A: Real Value (P) = $7,000Inflation rate (r) = 2.4% or 0.024Number of years (n) = 8

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) = $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: You observe the following market for European Call and Put options on the S&P 500 ETF: Today Spot…

A: A contract that allows its buyer to trade the underlying on a future date at a pre-specified price…

Q: ith plans to invest ¥12 million today. The rate of return has been estimated at 8 percent per year.…

A: The given problem can be solved using FV function in excel. FV function computes amount balance in…

Q: 10. A project is predicted to make an NPV of £24m in a boom, £16m in a medium growth economy and…

A: ANSWER THE CORRECT OPTION IS A)£10m THE EXPECTED NPV IS A)£10m COMPUTATION OF EXPECTED NPV NPV…

Q: For each growth rate below, (i) use the rule of 70 to calculate how long it will take incomes to…

A: The rule of 70 is the method of financial management that helps the investors to know the period in…

Q: A young man has decided to go into business at the age 40. He wishes to accumulate P200,000.00 at…

A: The given problem relates to growing annuity. A growing annuity is a series of cash flows…

Q: If velocity is constant at 10 and the money supply decreases from $1,800 billion to $1,400 billion,…

A: Velocity = 10 Initial money supply (M0) = $1800 billion New money supply (M1) = $1400 billion Let…

Q: How much must be invested now in order to get a return of 42000$ in 6 years time if the growth rate…

A: Data given: FV=$42000 n=6 years Rate(r)=18% p.a. compounded annually Required: Amount to be…

Q: 1. Suppose the consumption function is C = $400 billion + 0.8Y and the government wants to stimulate…

A: Solution: Suppose the consumption function is C = $400 billion + 0.8y and therefore the government…

Q: population of a country was approximater million. Use the exponential growth model A = Aet, in which…

A: The growth in the population do not follow any patterns but for simplicity it is assumed that growth…

Q: What will be the approximate population of the United States, if its current population of 280…

A: To calculate the population after 25 years we will use the below mentioned formula Population…

Q: How many years will it take for $20,000 to grow to $250,000, given a 12% compound growth rate?

A: The objective of this question is to find out the number of years it will take for an initial…

Q: In 10 years from now, how many future dollars will have the same buying power as $24,000 today? The…

A: Future value refers to the value of annuity at future date. It is the value determined when…

Q: 4) A project is predicted to have a return of -£16m in a recession, and the probability of a…

A: Expected Return - It is the return based on certain probability with possible outcome. It can be…

Q: 7. How many years would it take for money to triple in value at 20% per yea simple interest?

A: Let the principal be x And the amount be 3x Simple interest=Amount-principal…

Q: 4. An investment has a doubling time of 24 years. What is the annual growth rate? a. b. What is the…

A: Future value is double of current valuePeriod of double=24 years

Q: What would the future value of $100 be after 5 years at 12% compound interest? A company’s 2005…

A: Step 1: Future value of $100 after 5 years at 12% compound interestStep 2: Sales Growth from 200…

Q: Assume you are considering a USD 100,000 investment for which the future cash flows depend on the…

A: the normal worth is characterized as the distinction between anticipated benefits and anticipated…

Q: The exponential growth function is P(1) =

A: a. The exponential growth function P(t)=A*e^rt P(t)= 15642*e^0.061*t

Q: Scenarios: You work in the macroeconomic research department of an investment bank. Based on your…

A: A straddle is a strategy that involves buying a call option and a put option with the same strike…

Q: hat the Duration of Assets (DA) is 5 years and the duration of liabilities (DL) is 3 years. The…

A: Duration of security tells us that how much will be change in value of security with change in…

Q: The firm invests $5 million in a one-year project today. There is a single cashflow at time 1. The…

A: Given: Investment = $5 million 60% chances of realizing cash flows $9 million 40% chances of…

Q: You have invested $10,000 in this ETF at the beginning of year 2020 and its year-end value was…

A: Rate of return refers to the return earned on an investment or asset over a fixed period of time.…

Q: Scenarios: You work in the macroeconomic research department of an investment bank. Based on your…

A: A bear spread strategy is a strategy in which an investor sells a higher strike price put option and…

Q: e expected average rate of return in the next decade is 4%. What is the value of $60,000 ten years…

A: The value of assets increase with time and grows to larger amount over the period of time due to the…

Q: Suppose you plan to have $70,000 in 20 years from now and you can invest your savings at 9%…

A: Future value of amount includes the amount that is being deposited over the period of time and…

Q: 23. Grim Smith plans to invest ¥12 million, three years from now. The rate of return has been…

A: The worth of a present asset at some point in the future based on an anticipated growth rate is…

Q: If the required reserve ratio is 15%, currency in circulation is $400 Billion, checkable deposists…

A: The money multiplier refers to the changes which can be affected the value of money deposits up to…

Q: At what nominal rate c.q. does money double in 10 years?

A: Compounding refers readjustment of principal by adding interest earned or due till date to principal…

Q: Suppose Canada in 2018 has GDP per capita that is 80% of that in the U.S. Assume that GDP per capita…

A: In this question, we are required to determine the number of years it will take for the GDP Per…

Q: The international monetary fund is trying to raise $700 billion in 9 years. At 12% interest…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Compute the payoff and net payoff of a bear spread strategy built with put options in the three…

A: Put option gives the right but not the obligation to sell at the strike price. In a bear spread…

Q: Scenarios: You work in the macroeconomic research department of an investment bank. Based on your…

A: An option is a type of financial instrument that is based on the value of underlying securities,…

Q: EMA's 2022 sales were $10 million. If sales grow at 5% per year, how large will they be 5 years…

A: Future value is the estimation of future cash value which is likely to be received in the future…

Question

Today two economies have the same size (e.g., $1B). The growth rate for the first one is 3% and for the second, 6%. How many times the second economy will be larger than the first in 100
years? 17.65, 2, 10.32, 6.89

AI-Generated Solution

AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.

Unlock instant AI solutions

Tap the button
to generate a solution

Click the button to generate
a solution

SEE SOLUTION

Similar questions

The market for widgets is increasing by 15% per year from current profits of $2,000,000. Investing in a design change will allow the profit per widget to stay steady; otherwise the price will drop by 3% per year. If inflation in the economy is 4%, what is the present worth in Year-1 dollars of the savings over the next 5 years? 10 years? The interest rate is 10%.
According to the quantity theory of money, if the longminusrun economic growth rate is 3.6%, by how much should the Fed increase the money supply if it wants inflation to be 3%?
Most economies have a goal of maximizing the average consumption per period. Assume that during each year, an economy saves the same (to be determined) percentage S of its production. During a year in which the beginning capital level is K, a quantity K1y2 of capital is produced. If the economy saves a percentage S of its capital, then during the current year it consumes (1 2 S)K units of capital and, through savings, adds (SK) 1y2 units of capital. Also, during any year, 10% of all capital present at the beginning of the year depreciates or wears out. a. What annual savings percentage S maximizes the long-run average consumption level? Assume that year 50 represents the long run, so that the objective is the consumption level in year 50. You can assume the initial capital is 1 (for some appropriate measurement unit). b. Use SolverTable to see how the optimal value of S depends on the annual depreciation rate.
A country recorded GDP of $400 million in 2020 and $460 million in 2021. If the inflation rate between the two years was 10 per cent, the approximate real growth rate was?
Suppose in the year 2004 you invested $ 1000.- at an interest rate ? which is such that your capital doubles every 6 years (interest is compounded annually). That interest rate is percent. During the period 2004-2010 your money will grow by a factor . = During the period 2005-2011 your money will grow by a factor = . During the period 2007-2019 your money will grow by a factor . = During the period 2017-2035 your money will grow by a factor . = During the period 2010-2025 your money will grow by a factor . = When you retire in 50 years your investment will have grown to $ =
Please don't provide handwriting solution
If inflation averages 4 percent per year, how much purchasing power will$1.00 lose in 10 years?
1. Suppose growth rate of Real GDP is 6% and the growth rate of velocity is 3%. If Bangladesh Bank wants to have a 5 % inflation rate, what should be the growth rate of money supply according to the predetermined-money-growth-rate-rule? 2. Suppose you got 2000 taka note as Eid gift from your uncle. What are the minimum increase and the maximum increase in the money supply that may result? Why they might be different? Assume the required reserve ratio is 10 percent. 3. From the equation of exchange, how would you explain the impact of rise in money supply to real GDP and price level? Consider velocity and real GDP are constant.
Calculate the terminal value in 2026 where g is the constant growth rate of 5% and WACC is 8%, and the final year FCF Is -$355.28 million.
You have an investment that in today's dollars returns 15% of your investment in year 1,12% in year2,9%in year 3 , and the remainder in year 4 .What is the duration of this investment? () 4years2.95years3.5years3.22years

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS