The total amount accrued, principal plus interest at a rate of 9% per year compounded 1 times per year over 12 years is $1,996,992.00.
<h3>Compound Interest</h3>
Given Data
A = P + I where
P (principal) = $710,000.00
I (interest) = $1,286,992.00
Calculation Steps:
First, convert R as a percent to r as a decimal
r = R/100
r = 9/100
r = 0.09 rate per year,
Then solve the equation for A
A = P(1 + r/n)nt
A = 710,000.00(1 + 0.09/1)(1)(12)
A = 710,000.00(1 + 0.09)(12)
A = $1,996,992.00
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Answer:
15.18%
Explanation:
Calculation for the nominal annual rate
First step is to find EFF% using this formula
EFF%=[1+(Nominal rate percentage/Numbers of months in a year )]^Numbers of months in a year
Let plug in the formula
EFF%=[1+(15%/12)^12
EFF%=(1+0.0125)^12
EFF%=(1.0125)^12
EFF%=1.1608×100%
EFF%=116.08%
Second step is to find Rnom compounding quarterly of 116.08% using this formula
Rnom compounding quarterly = (1+(R/4)^4
Let plug in the formula
Rnom compounding quarterly= (116.08%)^(1/4) Rnom compounding quarterly= 1+ R/4
Hence,
Rnom compounding quarterly = 15.18%
Therefore Anne Lockwood should quote her customers with Rnom compounding quarterly of 15.18%
Answer:
The dead-weight loss from the tax is $2,250
Explanation:
Free market equilibrium price is P1
Total social economic benefit is the sum of:
- consumer surplus (area below demand curve and above price line P1) and
- producer surplus (area above supply curve and below P1)
When tax is imposed, quantity is reduced, price increased to P2 for consumer, P0 for supplier.
The part of the loss from consumer and producer surplus is compensated with the revenue from tax.
The other part (red triangle) is the dead-weight loss. Its amount is given by the area of the triangle with:
- base length being the tax amount ($15/unit) and
- height being the reduced quantity (300 units)
S = 
According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
<h3>
Who is Adam smith?</h3>
Scottish economist and philosopher Adam Smith was a leading proponent of political economy and a pivotal figure in the Scottish Enlightenment. According to Adam Smith's economic theory, markets typically function most effectively when the government keeps out of the way. A result of Adam Smith's beliefs on capitalism, free markets, and supply and demand, he is referred to as the "father of economics." Smith supported the idea of taxing income, profits, sales, and labor.
The Law of Demand and Supply, the Law of Self Interest, and the Law of Competition are Adam Smith's three economic laws. According to these laws, sufficient commodities would be produced at the lowest cost to satisfy demand in a market economy, and better items would be produced at lower costs owing to competition.
Hence, According to Adam smith, by pursuing its self-interest (maximizing profits), a firm tends to meet the needs of society.
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