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Fofino [41]
3 years ago
12

What is the present value of $5,000 due in ten years assuming money grows according to compound interest and the annual effectiv

e rate of interest is 4% for the first three years, 5% for the next two years, and 5.5% for the final five years?
Business
1 answer:
nadya68 [22]3 years ago
8 0

Answer:

$ 3,085

Explanation:

Given that;

The present value(PV) ------ ???

Future  payment (F) ----  $5,000

The annual effective rate are 4%, 5% and 5.5% respectively, which can be illustrated as;

r = 0.04, 0.05 and 0.055 respectively.

The present value  formula is given as:

PV=\frac{F}{(1+r)^n}

PV=\frac{5000}{(1+0.04)^3(1+0.05)^2(1+0.055)^5}

PV = 5000 × (1.04)⁻³(1.05)⁻²(1.055)⁻⁵

= $ 3,084.814759

≅ $ 3,085

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The relationship between the straight-line and double-declining-balance method is that they D. Produce the same total depreciation over an asset's useful life.

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2 years ago
In the short run, the quantity of output that firms supply can deviate from the natural level of output if the ___________ level
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1.  Actual Price

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Explanation:

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For example, the MISPERCEPTIONS THEORY asserts that output prices adjust more quickly to changes in the price level than wages do, in part because of long-term wage contracts. Suppose a firm signs a contract agreeing to pay its workers $15 per hour for the next year, based on an expected price level of 100 Year.

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4 years ago
What are the managerial implications of a borderless organization?
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