Answer:
You will pay back the lender exactly <u>$21,000</u>, which will represent <u>$20,600</u> of purchasing power.
Explanation:
you will pay back the lender exactly $21,000, which will represent $20,600 of purchasing power.
$20,000 for this purchase at a 5 percent fixed rate
=$20,000*5/100
=$20,000*0.05 = $1,000
=$20,000 + $1,000 = $21,000
Inflation will be 2 percent this year
=$20,000*2/100
=$20,000*0.02 = $400
=$20,000 + ($1,000 - $400)
=$20,000 + $600 = $20,600
Answer:
a. Straight-line method
Depreciation Expense for the first year: $333.75
b. Double-declining-balance method
Depreciation Expense for the first year: $667.5
c. Units-of-output method
Depreciation Expense for the first year: $450
Explanation:
a. Straight-line method
Depreciation Expense each year is calculated by following formula
Annual Depreciation Expense = (Cost of machine − Residual Value)/Useful Life = ($1,410 - $75)/4 = $333.75
Depreciation Expense for the first year: $333.75
b. Double-declining-balance method
Under the straight-line method, useful life is 4 years, so the asset's annual depreciation will be 25% of the Depreciable cost.
Depreciable cost = Total cost of machine - Residual value = $1,410-$75 = $1.335
Under the double-declining-balance method the 25% straight line rate is doubled to 50% - multiplied times
Depreciation Expense for the first year = $1.335 x 50% = $667.5
c. Units-of-output method
Depreciation Expense per copy = (Cost of machine − Residual Value)/Life in Number of Units = ($1,410 - $75)/13,350 = $0.1
Depreciation Expense for the first year = Depreciation Expense per copy x number of copies were made the first year = $0.1 x 4,500 = $450
The equilibrium price is the only price where the desires of consumers and the desires of producers agree—that is, where the amount of the product that consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied).
When two lines on a diagram cross, this intersection usually means something. On a graph, the point where the supply curve (S) and the demand curve (D) intersect is the equilibrium.
What Is a Demand Schedule?
In economics, a demand schedule is a table that shows the quantity demanded of a good or service at different price levels. A demand schedule can be graphed as a continuous demand curve on a chart where the Y-axis represents price and the X-axis represents quantity.
An example from the market for gasoline can be shown in the form of a table or a graph. A table that shows the quantity demanded at each price, such as Table 1, is called a demand schedule.
Price (per gallon) Quantity Demanded (millions of gallons)
$1.00 800
$1.20 700
$1.40 600
$1.60 550
$1.80 500
$2.00 460
$2.20 420
Table 1. Price and Quantity Demanded of Gasoline
Supply schedule
again using the market for gasoline as an example. Like demand, supply can be illustrated using a table or a graph. A supply schedule is a table, like Table 2, that shows the quantity supplied at a range of different prices. Again, price is measured in dollars per gallon of gasoline and quantity supplied is measured in millions of gallons.
Price (per gallon) Quantity Supplied (millions of gallons)
$1.00 500
$1.20 550
$1.40 600
$1.60 640
$1.80 680
$2.00 700
$2.20 720
Table 2. Price and Supply of Gasoline
Equilibrium price
gallon) Quantity demanded (millions of gallons) Quantity supplied (millions of gallons)
$1.00 800 500
$1.20 700 550
$1.40 600 600
$1.60 550 640
$1.80 500 680
$2.00 460 700
$2.20 420 720
Table 3. Price, Quantity Demanded, and Quantity Supplied
Because the graphs for demand and supply curves both have price on the vertical axis and quantity on the horizontal axis, the demand curve and supply curve for a particular good or service can appear on the same graph. Together, demand and supply determine the price and the quantity that will be bought and sold in a market.
The equilibrium price is the only price where the plans of consumers and the plans of producers agree—that is, where the amount of the product consumers want to buy (quantity demanded) is equal to the amount producers want to sell (quantity supplied). This common quantity is called the equilibrium quantity. At any other price, the quantity demanded does not equal the quantity supplied, so the market is not in equilibrium at that price.
In Figure 3, the equilibrium price is $1.40 per gallon of gasoline and the equilibrium quantity is 600 million gallons. If you had only the demand and supply schedules, and not the graph, you could find the equilibrium by looking for the price level on the tables where the quantity demanded and the quantity supplied are equal.
The word “equilibrium” means “balance.” If a market is at its equilibrium price and quantity, then it has no reason to move away from that point. However, if a market is not at equilibrium, then economic pressures arise to move the market toward the equilibrium price and the equilibrium quantity.
Imagine, for example, that the price of a gallon of gasoline was above the equilibrium price—that is, instead of $1.40 per gallon, the price is $1.80 per gallon. This above-equilibrium price is illustrated by the dashed horizontal line at the price of $1.80 in Figure 3. At this higher price, the quantity demanded drops from 600 to 500. This decline in quantity reflects how consumers react to the higher price by finding ways to use less gasoline.
Moreover, at this higher price of $1.80, the quantity of gasoline supplied rises from the 600 to 680, as the higher price makes it more profitable for gasoline producers to expand their output. Now, consider how quantity demanded and quantity supplied are related at this above-equilibrium price. Quantity demanded has fallen to 500 gallons, while quantity supplied has risen to 680 gallons. In fact, at any above-equilibrium price, the quantity supplied exceeds the quantity demanded.
Explanation:
The CPI stands for Consumer Price index
. It refers to the change in the price level with respect to the goods and services available in the market.
The CPI is calculated below
= Given the cost of market goods and services using the price of given year by the Given cost of market goods and services using the price of a base year and then it would be multiplied by 100
While the GDP Deflator deals with the price of all goods and services that are produced in domestic.
