What is the present value of a payment of $5,000 at the end of one year and a second payment of $7,000 at the end of two years if the interest rate is 5 percent?O A. $11,201.84O B. $11,111.11O C. $10,985.14O D. $12,250.32

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Stephanie loans P400,000.00 from a bank with interest at 6% compounded annually. She agrees to pay her obligations by paying 5 equal payments, the first being due at the end of 10 years. Find the annual payments. O a. P97,832.68 O b. P97,328.68 O c. P97,382.68 O d. P97,238.68
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You have $40,000 of current income and $60,000 of future income. The interest rate between the current and future period is 5 percent. What is the maximum amount you could consume in the future? O $100,000 O $107,000 O $102,000 O $110,000
Suppose you win the Powerball lottery this year, which is worth $500 million. You can choose to take a lump sum now of $475 million or you can "annuitize" your winnings. Annuitization means that you will receive the total jackpot money in 5 equal annual payments of $100 million starting next year. Assume that your lottery winnings are not taxed. If the interest rate is 1.0 percent, the present value of the 5 equal payments is $ million. (Round your response to two decimal places.)
Question 8 Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line
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Suppose you net investment at time t (measured in years) is given (in pounds) by I(t) = 500 – 200 | x+1 Which of the following best represents the capital generated between the end of the 2nd year and the end of the 5th year? O a. a. £1361.37 O b. £1678.11 O c. £1544.03 O d. £1242.78
What is the value of n with interest 10% that makes the present value equal to O? 100 100 3. lo00 Given formula: (1+i)"-1 P=A- iX(1+i)"
The following five individuals have different utility functions over food (good x) and clothing (good y): 1) u₁(x, y) = 3x²y 2) u₂(x, y) = 2√x + y 3) Uz(x, y) = x0.6y0.4 4) u₁(x, y) = x² + y² 1 5) us(x, y) = x + 3y For each of these people: a) Compute their marginal utilities of good x, MUx = Ju(x,y) MU, = ду du(x,y) ax b) Check whether the property of "more is better" is satisfied for both goods? Explain. [Hint: Check whether marginal utilities are positive assuming positive amounts of good x and good y] ƏMUX əx and marginal utility of good y, c) Does the marginal utility of good x diminish, remain constant, or increase as each of the individuals buys more x? Explain. [Hint: There are 2 ways to do it: 1) visually check what happens to the expression of MUx when x increases (does it decrease, keep constant or decrease?); or 2) take the partial derivative of this marginal utility with respect to x, that is ƏMUx .aMUX ƏMUX If 0, the marginal utility of x is increasing in x] d) Does the…
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What is the present value of a payment of $5,000 at the end of one year and a second payment of $7,000 at the end of two years if the interest rate is 5 percent? O A. $11,201.84 O B. $11,111.11 O C. $10,985.14 O D. $12,250.32