Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 19, Problem 1QR
To determine
Calculation of present value of money.
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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.
Akhisha wanted to buy a cell phone which will have a price of P13,000 for 90 days from now due to the increase in prices of 12 percent simple interest. What is the present worth of a cell phone?
a. P15,621
b. P12,621
c. P13,621
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In five years, you want to be able to buy a new car for $30,000. If the interest rate is 3 percent a year, what is the present value of this sum?
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$30,000.00
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$25,500.00
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$25,878.26
D.
$34,778.22
Chapter 19 Solutions
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
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- The interest rate is 6 percent a year and you expect to receive $1,000 next year and the following year. What is present value of $1,000 to be received in two years? The present value of $1,000 to be received in two years is $____ Answer to 2 decimal places Thanks!arrow_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_forwardYou buy a bond that has an annual interest rate of 2 percent and a coupon of $4. What is the price of the bond?arrow_forward
- Suppose 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_forwardGail 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?arrow_forwardWould a dollar tomorrow be worth more to you today when the interest rate is 20% or 10%?arrow_forward
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