1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Law Incorporation [45]
3 years ago
13

At an inflation rate of 7 percent, the purchasing power of $3 would be cut in half in 10.25 years. how long to the nearest year

would it take the purchasing power of $9 to be cut to one-fourth if the inflation rate were only 6.5 percent
Business
1 answer:
lyudmila [28]3 years ago
7 0
The applicable formula is;
A = P(1-r)^n

Where;
A = Final purchasing power
P = Current purchasing power
r = inflation
n = Number of years when P changes to A

Confirming the first claim:
A = 1/2P (to be confirmed)
P = $3
r = 7% = 0.07
n = 10.25 years

Using the formula;
A = 3(1-0.07)^10.25 = 3(0.475) ≈ 3(0.5) = $1.5
And therefore, A = 1/2P after 10.25 years.

Now, give;
P = $9
A = 1/4P = $9/4 = $2.25
r = 6.5% = 0.065
n = ? (nearest year).

Substituting;
2.25 = 9(1-0.065)^n
2.25/9 = (1-0.065)^n
0.25 = (1-0.065)^n
ln (0.25)= n ln(1-0.065)
-1.3863 = -0.0672n
n = (-1.3863)/(-0.0672) = 20.63 years

To nearest year;
n = 21 years

Therefore, it would take approximately 21 years fro purchasing power to reduce by 4. That is, from $9 to $2.25.
You might be interested in
Management can make any form of distribution to the firm’s shareholders using the company’s free cash flow (FCF). The underlying
vovikov84 [41]

Answer:

A good use of free cash flow is to Invest in nonoperating assets

Explanation:

Free cash flow (FCF) is a measure of how much cash a business generates after accounting for capital expenditures such as buildings or equipment. This cash can be used for expansion, dividends, reducing debt, or other purposes.

If the underlying objective is to maximize shareholder wealth by increasing the firm’s value. Any use of FCF that negatively affects the firm’s value is not considered a good use of the FCF.

A good use of FCF would be to invest in nonoperating assets such as marketable securities, investments in other companies, etc.)

3 0
3 years ago
Ken makes a monthly income of $3000 after taxes. Every month, he spends 40% of his income on clothing. How much money does Ken s
In-s [12.5K]
Take 40 over a 100 as a fraction and 3000 over 1 as a fraction and multiply them. 3000 multiply by 40 is =120000 and divide that by 100 would be 1200

$1200
 
7 0
3 years ago
On average, 35% of the sales on account are collected in the month of sale, 40% are collected in the month following sale, 10% a
stellarik [79]

Answer:

35% of sales(say $2,000,000) in April

$700,000

Explanation:

Step one :

Assuming that the sales made for April is $2,000,000

According to the conditions in which money is collected 35% of sales made for a month is collected for the month

For april the expected amount

=35/100*2,000,000

=$700,000

4 0
3 years ago
Read 2 more answers
Dot miller owns a small chain of dive shops. she is interested in knowing how many potential customers she will need to sample i
uranmaximum [27]
Standard deviation is an amount of the dispersion of a group of data from its mean. It is computed as the square root of variance by distinguishing the variation amid each data point relative to the mean. If the data points are distant from the mean, there is greater deviation within the data set. But since not all are given in this problem Dot can use some previous knowledge about the population, undertake a pilot study or approximation the range (7), and divide by 6.
7 0
3 years ago
Less popular open source products are not likely to attract the community of users and contributors necessary to help improve th
daser333 [38]

Less popular open source products are not likely to attract the community of users and contributors necessary to help improve these products over time. This situation reiterates the belief that network effects are a key to success.

<h3>What are Network Effects?</h3>
  • The phenomenon known as the "network effect" describes how more individuals using a commodity or service results in a rise in value. An illustration of the network effect is the internet.
  • Since the internet was first only useful to the military and a small number of researchers, there weren't many users.
  • However, as more people had access to the internet, more material, information, and services were created by users.
  • More people were drawn to connect and transact business with one another as a result of website development and enhancement. A network effect resulted from the internet offering more value as traffic increased.

know more about Network effects

brainly.com/question/28059618

#SPJ4

6 0
1 year ago
Other questions:
  • Pizza International, Inc. operates 700 family restaurants around the world. The company’s annual report contained the following
    8·1 answer
  • Glubert corp., an adhesive manufacturing company, makes a deal with an insurance company to provide its employees with life insu
    9·1 answer
  • Line of customers waiting to pay. The first customer asks you for directions to the airport.
    9·2 answers
  • Which type of intellectual property can protect your company's logo?
    7·2 answers
  • The greater the number of persons affected by a negative outcome, the more likely it is that marketers will recognize a problem
    11·1 answer
  • Assume a market is in equilibrium. There is an increase in supply, but no change in demand As a result the equilibrium price ___
    9·1 answer
  • Which of the following should be filed directly after Nigel?Exit Test A Nathaniel B Nickel C Nuttall D Nicolas
    5·1 answer
  • At which stage of the organizational buying decision process would purchasing and engineering personnel visit potential supplier
    9·1 answer
  • When Patey Pontoons issued 6% bonds on January 1, 2018, with a face amount of $600,000, the market yield for bonds of similar ri
    5·1 answer
  • Match the tasks with the professionals who would complete them.
    8·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!