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Marta_Voda [28]
3 years ago
12

A car's price is currently $20,000 and is expected to rise by 4% a year. if the interest rate is 6%, how much do you need to put

aside today to buy the car one year from now?a. $18,182
b. $19,231

c. $19,263d. $14,085
Business
1 answer:
kati45 [8]3 years ago
5 0

Answer:

  • <u><em>$19,591.63</em></u>

Explanation:

<u />

<u>1. Calculate the price of the car in a year from now.</u>

This is add the 4% on the current price:

  • $20,000 × 1.04 = $20,800

<u />

<u>2. Calculate the amount of money that must be put aside to have $20,800 in a year:</u>

<u />

Use the formula of monthly compound interest, with 6% annual interest

  • r = 6% / 12 = 0.06/12 = 0.05
  • P(1 + 0.005)¹² = $20,800
  • P = $20,800 / (1 + 0.005)¹² = $19,591.63
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Answer:

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Explanation:

Nominal GDP is the the total value of goods produced in a country in a given time period and valued at the current market price i.e not adjusted for inflation.

Here to calculate nominal GDP for Mainia in 2006, the total quantity of goods produced in the current year(2006) will be multiply by the current market price.

Cranberries                                               Maple Syrups                 Total

50 units                                                     100 units

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$1,000                                                      $1,000                              $2,000

In contrast, Real GDP is measured using the base year price. The reason is to adjust for inflation which might have occurred between the two years.

Here to calculate real GDP for Mainia in 2006, the total quantity of goods produced in the current year (2006) will be multiply by the base year price (2005):

Cranberries                                               Maple Syrups                 Total

50 units                                                     100 units

<u>$10   </u>                                                          <u> $15    </u>

$500                                                          $1,500                             $2,000

GDP deflator measures the movement in value of goods and services produced in the current year in relation to the base year value.

Here is the formula:

GDP deflator = <u>Nominal GDP</u>   x  100

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GDP deflator = <u>$2,000</u>   x 100

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Answer:

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Explanation:

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