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Finger [1]
3 years ago
9

Your grandparents offer you $500 in one year. Assuming no inflation, if the interest rate is 10%, you areindifferent between the

ir gift in one year and _____ today.A. $450B. $500C. $454.55D. $550E. $413.22
Business
1 answer:
LUCKY_DIMON [66]3 years ago
5 0

Answer:

PV=454.54

Explanation:

This problem can be solved applying the concept of future value, the 500 represents money in the future an the 10% is how that money is valued over time

FV=PV*(1+i)^{n}

where FV is future value, PV is the present value, i is the periodic interest rate and n is the number of periods. So applying to this particular problem we have:

500=PV*(1+0.1)^{1}

solving for PV we have:

PV=454.54

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6 0
3 years ago
Currently in​ Economica, the frictional rate of unemployment is 2.0​%, the structural rate of unemployment is 2.0​%, and the cyc
ollegr [7]

Answer:

7,5%

Explanation:

natural rate of unemployment is generally comprised of 3 unemployment types: structural rate of unemployment, cyclical rate of unemployment and frictional unemployment. This state exists even in a healthy environment commercially viable as workers will always seek for new jobs. At the time they leave to seek for new jobs, that period relates to natural rate of unemployment of the country or state.

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3 years ago
How much would you need to deposit in an account now, such that in 5 years your account will have increased to $8,000, assuming
VladimirAG [237]

Answer:

$6268.21

Explanation:

Future value = $8000

Interest(r) = 5%

Period (n)= 5 years

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= 8000 / (1.05)5

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