. Provide solutions to the following.

Answer the following questions and use the excel finance function to answer the questions. show the excel equation.

1.

Payday loans are very short-term loans that charge very high interest rates. You can borrow $500today and repay $575 in two weeks. What is the compound annual rate implied by this 15 percent rate charged for only two weeks?

2. Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $225 in two weeks. What is the compound annual rate implied by this 12.5 percent rate charged for only two weeks?

3. What is the interest rate of a 4-year, annual $1,000 annuity with present value of $3,500?

4.

Mr. Jones decides to purchase a car for $10,000.The dealer offers to finance the car at 8% interest over a 4 year period.What is the payment amount that Mr. Jones would be expected to pay?

5.

You wish to buy a $20,000 car. The dealer offers you a 5-year loan with an 5 percent APR. What are the monthly payments?

6.

Joey realizes that he has charged too much on his credit card and has racked up $5,000 in debt. If he can pay $150 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt?

7.

Mrs. Simpson is saving for her retirement.If she makes a payment of $1,000 at the end of each month for 15 years and earns a rate of 5.25% compounded 12 times per year, how much will she have in her retirement account when she is ready to retire?

8.Monica has decided that she wants to build enough retirement wealth that, if invested at 7 percent per year, will provide her with $3,000 monthly income for 30 years. To date, she has saved nothing, but she still has 20 years until she retires. How much money does she need to contribute per month to reach her goal?

9.Hank purchased a $28,000 car two years ago using an 8 percent, 5-year loan. He has decided that he would sell the car now, if he could get a price that would pay off the balance of his loan. What is the minimum price Hank would need to receive for his car?

10.Using the same data that is in problem #9, how much principle did Hank pay during the12 months he had his car?

11.W11.What is the future value of a $500 annuity payment over eight years if interest rates are 14 per14 percent?

Using

12.What is the present value of a $775 annuity payment over six years if interest rates are 11 percent?

13.

What is the present value of a $1,200 payment made every year forever when interest rates are4.5 percent?

14.

A loan is offered with monthly payments and a 15.5 percent APR. What is the loan's effective annual rate (EAR)?

15.

Assume that you contribute $300 per month to a retirement plan for 25 years. Then you are able to increase the contribution to $500 per month for 20 years. Given a 9 percent interest rate, what is the value of your retirement plan after 45 years?

16.What is the interest rate of a 6-year, annual $10,000 annuity with a present value of $45,000?

1) The estimated Canadian processed pork demand and supply functions are as the follow- ings: Qp = 100-3 p + 3 /s + 5 p + 2Y, Q = 100 +6 p - 8/ where Q is the quantity in million kilograms (kg) of pork per year; p is the dollar price per kg. pe is the price of beef per kg, pe is the price of chicken per kg, pa is the price of hogs per kg, and Y is the average income in thousand dollars. Suppose that ps = $8.00 per kg, p. = $6.00 per kg, p; = $4 per kg, and 1 = $11. Answer the following questions. (Note that you need to show your calculations and explain your results to receive full credit!) a) Assuming ceteris paribus, calculate price elasticity of supply and demand at the equilib rium price and quantity under the conditions stated in above and explain your results. Are the demand and supply at equilibrium elastic? Explain. b) Using the price elasticity of demand, calculate how much the price would have to rise for consumers to demand 28 fewer million kg than the equilibrium quantity? c) What is the income elasticity of demand at the market equilibrium quantity, where Y=$1 1? Is pork a normal good? Assuming all else unchanged, if the average income increases by 20%, what would be the expected change in the demand for pork? d) If the demand function (Qp = 100 -3 p + 3 / + 5 p + 2 Y) is then re-estimated using5. Consider a Solow growth model with population growth rate n > 0. Assume the technology growth rate is 0. Let k*(s) be the steady-state capital-labor ratio given savings rate s. (a) Show that the steady-state capital-labor ratio k* (s) is increasing in the savings rate s. (b) Express the steady-state per-capita consumption c* as a function of savings rate s. (c) Using the function above, express the condition for the savings rate s* that maximizes the steady-state per-capita consumption (i.e., what condition(s) would s* have to satisfy?). (Such a savings rate is called the golden-rule savings rate.) (d) Assume Cobb Douglas production function F(K, L) = KoLl-a where 0