Answer:
623,459.79 and 224.51
Explanation:
first lets consider the first part of the problem and is how mucho do i need to accumulate for having an annuity for 25 years. this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the present value of future payments affected by an interest rate.by definition the present value of an annuity is given by:
where is the present value of the annuity, is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
look at the value 25*12 because the problem tells us is during 25 years but the payment is monthly, and look at the 0.006 and it is comming from the APR/12 and we must do that because this rate is componded Monthly:
so for the second part we must calculate the second part we must calculate the acumulated value at 40 years of work:
where is the future value of the annuity, is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
solving for P we have:
P=224.51
Answer:
Option A
Explanation:
Complete Question
A university conducts a survey of students, which shows that a 10 percent tuition hike would lead to a 12
percent decreases in the enrollment. If the university wants to increase its total revenue, it should ________
tuition because the demand for education at this university is ________.
A) not raise; elastic B) raise; inelastic C) not raise; inelastic D) raise; elastic
Solution -
The demand for college in the market is elastic which means that variation in variables such as college fees deeply impact the demand. If college fees is increased, the intakes or enrollment will fall down which means that the demand is not stable or on the basis of quality. Therefore, the demand for the college will not rise on fees hike and it shall be an elastic demand.
Answer:
The payments will be of 1,797.02 dollars
Explanation:
We need tyo calcualte the PTM of an ordinary annuity which present value is 8,000. The time will be 5 years and the discount rate 4%
PV $8,000.00
time 5 years
rate 4% = 4/100 = 0.04
PTM: $ 1,797.017
Answer:
- Equity = 20.34%
- Debt = 79.66%
Explanation:
Book value of stock:
= 8,300,000 * 4
= $33,200,000
Total book value = BV of stock + BV of bonds
= 33,200,000 + 70,000,000 + 60,000,000
= $163,200,000.
Weight of Equity:
= 33,200,000 / 163,200,000
= 20.34%
Weight of debt:
= (70,000,000 + 60,000,000) / 163,200,000
= 79.66%