Use economic equivalence to determine the amount of money or value of i that makes the following statements correct. (a) $5000 today is equivalent to $4275 exactly 1 year ago at i = ___% per year. (b) A car that costs $28,000 today will cost $____ a year from now at i = 4% per year. (c) At i = 4% per year, a car that costs $28,000 now, would have cost $____ one year ago. (d) Last year, Jackson borrowed $20,000 to buy a preowned boat. He repaid the principal of the loan plus $2750 interest after only 1 year. This year, his brother Henri borrowed $15,000 to buy a car and expects to pay it off in only 1 year plus interest of $2295. The rate that each brother paid for his loan is ___ % for Jackson and ___ % per year for Henri. (e) Last year, Sheila turned down a job that paid $75,000 per year. This year, she accepted one that pays $81,000 per year. The salaries are equivalent at i = ____% per year.
Use economic equivalence to determine the amount
of money or value of i that makes the following
statements correct.
(a) $5000 today is equivalent to $4275 exactly
1 year ago at i = ___% per year.
(b) A car that costs $28,000 today will cost
$____ a year from now at i = 4% per year.
(c) At i = 4% per year, a car that costs $28,000
now, would have cost $____ one year ago.
(d) Last year, Jackson borrowed $20,000 to buy
a preowned boat. He repaid the principal of
the loan plus $2750 interest after only 1 year.
This year, his brother Henri borrowed
$15,000 to buy a car and expects to pay it off
in only 1 year plus interest of $2295. The rate
that each brother paid for his loan is ___ %
for Jackson and ___ % per year for Henri.
(e) Last year, Sheila turned down a job that paid
$75,000 per year. This year, she accepted one
that pays $81,000 per year. The salaries are
equivalent at i = ____% per year.
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