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trapecia [35]
3 years ago
7

Your grandfather has promised to give you​ $500 a year at the end of each of the next four years if you earn Cs or better in all

of your courses each year. Using a discount rate of​ 7%, which of the following is correct for determining the present value of the​ gift?
a. PV = $500x7%x4
b. PV = $500x(PV factor, i=4%, n =7)
c. PV = $500x(Annuity PV factor, i=7%, n=4)
d. PV = $500x(Annuity PV factor, i=7%, n=4)
Business
2 answers:
aleksandr82 [10.1K]3 years ago
7 0

Answer:

d. PV = $500x(Annuity PV factor, i=7%, n=4)

Explanation:

A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.

Formula for Present value of annuity is as follow

PV of annuity = P x Present value factor

PV of annuity = P x [ ( 1- ( 1+ i )^-n ) / i ]

As discount rate is 7%, so

i = 7%

Number of payments is 4

n = 4

Bezzdna [24]3 years ago
5 0

Answer:

The correct answer is option (d) PV = $500x(Annuity PV factor, i=7%, n=4)

Explanation:

Given data;

P = $500

rate (r) = 7%

years (n)= 4

The present value of goods is determined using the formula;

PV of annuity = P x Annuity present value factor----------------1

But,

<h3>Annuity present value factor =  [1-(1+i)⁻ⁿ)]/i ------------2</h3>

Putting equation 2 into equation 2, we have

PV of annuity = P x Annuity present value factor

<h3>PV of annuity = P * [1-(1+i)⁻ⁿ)]/i -----------------------3</h3>

where;

PV = present value

i = rate

n = number of years

P = price

To calculate PV using equation 3, option (d) is the appropriate option

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"North Shore Community College reimburses faculty members $.535 cents per mile to go to a workshop. Professor Wales submitted he
Pachacha [2.7K]

Answer:

$347.81

Explanation:

Data provided in the question

Cents per mile to go to workshop = $0.535

And, the total miles traveled = 650.11 miles

So, the reimbursement expect would be

= Cents per mile to go to workshop × the total miles traveled

= $0.535 × 650.11 miles

=  $347.81

In order to find out the reimbursement, we simply multiplied the cents per mile with the total miles traveled

7 0
3 years ago
ssume that interest rate parity exists. You expect that the one-year nominal interest rate in the U.S. is 7%, while the one-year
EleoNora [17]

Answer:

The answer is A. $5,784,000

Explanation:

[(1.08)/(1.11)] -1 = -3.6%

Thus one year forward rate is 0.60*[1 +(0.036)] = $5784

$5784 * 10 000 000= <u>$5,784,000</u>

8 0
3 years ago
Intelligent agents are also known as _____.
9966 [12]
<span>Intelligent agents are also known as Robots (or bots)

An intelligent software agent embodied mechanisms that are similar with humann
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4 0
3 years ago
A Quality Analyst wants to construct a sample mean chart for controlling a packaging process. He knows from past experience that
ZanzabumX [31]

On Monday and Tuesday, the process appears to be out of control.                                                                                                                                                

<u>Explanation</u>:

  • There are five days Monday, Tuesday,Wednesday, Thursday and Friday. Monday and Tuesday have weight up to 21. Wednesday weights up to 21.
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7 0
2 years ago
Welfare economics is the study of Select one: a. taxes and subsidies. b. how technology is best put to use in the production of
icang [17]

Answer:

Correct option is (d)

Explanation:

Welfare economics deals with the study of distribution of resources affect the overall welfare of the society and economy as a whole.

It is a part of economics that studies the role of government in aligning policies for the welfare of the society and ensuring that every section of the society is equally developed.

The concept was developed as inequality in distribution of wealth and resources was observed across different sections of the economy. Poor was becoming poorer and rich, becoming richer. This hampered overall growth of the economy, thereby giving birth to welfare economics.

7 0
2 years ago
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