Answered step by step
Verified Expert Solution
Question
1 Approved Answer
-If you make regular periodic annual withdrawals of 800 during 5 years (say between 2001 and 2005), with nominal interest rate of 6% compounded annually.
-If you make regular periodic annual withdrawals of 800 during 5 years (say between 2001 and 2005), with nominal interest rate of 6% compounded annually. We want to find out what the present value of your withdrawals is based on the year 2000. Explain briefly (without computations) why the following answer is wrong: Knowing that the total amount withdrawn is 4000, therefore the present value is 4000/(1+0.06)^5 -Do you agree with this reasoning? explain why or why not using both words and computations. The unit price of a product goes up from 1000 to 1020. This leads to a decrease in sales from 50 to 48 units. A student concluded that the demand is inelastic since the big change in price of 20 led to a small change in quantity of 2 units. On Jan 1, 2010 you took out a loan of 40,000 that you pay back in equal regular blmonthly payments A over six years, starting on March 1st 2010. Interest is at 12% per annum compounded bimonthly DATE PAYMENTS PV or FV March 1st 2010 May 1st 2010 A Jan 1 2016 How many payments are made? Determine if you're looking for the Present Value OR the Future Value of each payment (& date of this PV/FV). Then complete the Math expressions of the last column of the table. Write out the geometric sum of all the expressions of this column which will allow you to find A. STOP, DO NOT SOLVE for the exact value of A (You're not allowed to use the following data in the preceding parts of the exercise.) Given that the correct value for Ais 1569.31, how much is repaid over the 6-year period? How much is the interest paid
-If you make regular periodic annual withdrawals of 800 during 5 years (say between 2001 and 2005), with nominal interest rate of 6% compounded annually. We want to find out what the present value of your withdrawals is based on the year 2000. Explain briefly (without computations) why the following answer is wrong:
Knowing that the total amount withdrawn is 4000, therefore the present value is 4000/(1+0.06)^5
-Do you agree with this reasoning? explain why or why not using both words and computations.
The unit price of a product goes up from 1000 to 1020. This leads to a decrease in sales from 50 to 48 units. A student concluded that the demand is inelastic since the big change in price of 20 led to a small change in quantity of 2 units.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started