Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
Principles Of Economics, Ap Edition, 9781337292603, 1337292605, 2018
8th Edition
ISBN: 9781337292603
Author: Mankiw
Publisher: Cengage Learning (2018)
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Chapter 27, Problem 1PA
To determine

Calculation of future 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.
A company in real estate sold a house about 200 years ago for $20. If they had invested this amount at an interest rate of 10 percent per year, 2. how much would they have today? The same company has an investment project that would cost $25 million today and yield a payoff of $30 million in 3 years. Should the firm undertake the project if the interest rate is 8 percent? 6 percent ? Can you figure out the exact cutoff for the interest rate between profitability and non profitability? 3. The same company has an investment project that would cost $25 million today how many years will take to yield a payoff of $30 million with 9.5%?
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