Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 11.A, Problem 10P
(a)
To determine
The amount received by 30 annual payments.
(b)
To determine
Present discount value.
(c)
To determine
Present discount value.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
please answer
Angela puts $5,000 in a savings account that pays 5 percent per year.
The future value of her money one year from now is $
As the interest rate
(Enter your response as a whole number.)
the future value of Angela's $5,000 savings will increase.
Gail has won a lottery that pays her $100,000 at the end of this year and increases by 15 percent per year thereafter for 30 years. Leon has offered Gail $10,500,000 today in exchange for all the money she will receive. If Gail can get 6 percent interest on her savings, is this a good deal? What is the present value of the lottery winnings?
Chapter 11 Solutions
Principles of Economics (12th Edition)
Ch. 11.A - Prob. 1PCh. 11.A - Prob. 2PCh. 11.A - Prob. 3PCh. 11.A - Prob. 4PCh. 11.A - Prob. 5PCh. 11.A - Prob. 6PCh. 11.A - Prob. 7PCh. 11.A - Prob. 8PCh. 11.A - Prob. 9PCh. 11.A - Prob. 10P
Ch. 11.A - Prob. 11PCh. 11.A - Prob. 12PCh. 11 - Prob. 1.1PCh. 11 - Prob. 1.2PCh. 11 - Prob. 1.3PCh. 11 - Prob. 2.1PCh. 11 - Prob. 2.2PCh. 11 - Prob. 2.3PCh. 11 - Prob. 2.4PCh. 11 - Prob. 2.5PCh. 11 - Prob. 2.7PCh. 11 - Prob. 2.8PCh. 11 - Prob. 2.9PCh. 11 - Prob. 3.1PCh. 11 - Prob. 3.2PCh. 11 - Prob. 3.3PCh. 11 - Prob. 3.4PCh. 11 - Prob. 3.5PCh. 11 - Prob. 3.6P
Knowledge Booster
Similar questions
- Give typing answer to all parts?arrow_forwardEconomics You are planning to take out a 5 hundred thousand dollar fixed-rate mortgage with a 30- year term and a stated annual mortgage rate of 5.7 percent. Your lender offers to lower your stated annual interest rate by one-quarter of a percentage point for each discount point you buy. What will your monthly payment be if you buy 3 discount points? Round your answer to the nearest dollar. Answer the following based on the information from the previous question. Approximately how many months do you need to stay in the mortgage to make it worthwhile to pay the discount points? Round your answer to two decimal places.arrow_forwardCalculate the present value of each cashflow using a discount rate of 7%. Which do you most prefer most? Show and explain all supporting calculations! Cashflow A: receive $60 today and then receive $60 in four years. Cashflow B: receive $12 every year, forever, starting today. Cashflow C: pay $50 every year for five years, with the first payment being next year, and then subsequently receive $30 every year for 20 years. Cashflow D: receive $9 every other year, forever, with the first payment being next year.arrow_forward
- Hi! Can you help me with the question below? Matt has the choice between receiving $100 now or receiving $140 in two years. Which of the following statements is true? A) If the interest rate is 20% he should take the $100 now.B) If the interest rate is 10% he should take the $100 now.C) He should not take the $100 now if the interest rate is anything below 20%.D) None of the above.arrow_forwardSuppose a person has a total credit card debt of $1,380 that has a 15 % yearly interest rate. This person also has a savings account with $3,000 that pays 3 % interest per year. Despite the net loss, the person keeps both. Calculate how many times the person appreciates the $1 of savings more than $1 of credit card debt if the person relates similarly to both values of percent paid and received. Enter your answer in the box below and round to two decimal places if necessary. Answer 2 Pan E Keypad Keyboard Shortcuts timesarrow_forwardSuppose a person has a total credit card debt of $1,100 that has a 11 % yearly interest rate. This person also has a savings account with $5,500 that pays 1 % interest per year. Despite the net loss, the person keeps both. Calculate how many times the person appreciates the $1 of savings more than $1 of credit card debt if the person relates similarly to both values of percent paid and received, Enter your answer in the box below and round to two decimal places if necessary. Answer Keypad Keyboard Shortcuts timesarrow_forward
- If the interest rate is 3 percent, the present value of $900 received at the end of four years is: Multiple Choice $792.00. $799.64. $873.79. $927.40.arrow_forwardI need answer within 10 minutes please with my best wishesarrow_forwardIn 2021, a baseball player signed a contract worth $65.7 million. The contract called for $11 million immediately and a salary of $3.7 million in 2022, $9.9 million in 2023, $11 million in 2024, $9.6 million in 2025 and 2026, and $10.9 million in 2027. If the appropriate interest rate is 7 percent, what kind of deal did the player dig out of the dirt? Assume all payments other than the first $11 million are paid at the end of the contract year. Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. Present valuearrow_forward
- You expect to receive $10,000 at graduation in two years. You plan on investing it at 9 percent until you have $60,000. How long will you wait from now?arrow_forwardSuppose you buy a big-screen TV with $1,000 down and $500 per year for the next two years. If the interest rate is fixed at 5%, what is the present value of the TV?arrow_forwardAt a military base in Texas, Corporal Stan Moneymaker has been offered a wonderful savings plan. These are the salesperson’s words: “During your 48-month tour of duty, you will invest $200 per month for the first 45 months. We will make the 46th, 47th, and 48th payments of $200 each for you. When you leave the service, we will pay you $10,000 cash.” Is this a good deal for Corporal Moneymaker? Use the IRR method in developing your answer. What assumptions are being made by Corporal Moneymaker if he enters into this contract? ( please solve the ırr method not excel solution)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningBrief Principles of Macroeconomics (MindTap Cours...EconomicsISBN:9781337091985Author:N. Gregory MankiwPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning