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inessss [21]
3 years ago
12

Sam Robinson borrowed $11,000 from a friend and promised to pay the loan in 10 equal annual installments beginning one year from

the date of the loan. Sam’s friend would like to be reimbursed for the time value of money at a 10% annual rate. What is the annual payment Sam must make to pay back his friend? (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Business
1 answer:
Y_Kistochka [10]3 years ago
4 0

Answer:

P = $1790.01

Explanation:

Given data:

Borrowed money = $11,000

Number of installment = 10

Annual rate of interest = 10%

11,000 = P(1.1)^1 + P(1.1)^2 + P(1.1)^3 + P(1.1)^4 + P(1.1)^5 + P(1.1)^6 + P(1.1)^7 + P(1.1)^8 + P(1.1)^9 + P(1.1)^10

\frac{11,000}{17.53} = P

P = $627.45

PV of annuity is given as:

PV of annuity = P*[\frac{(1-(1+r)^{-n})}{ r}]

P - Periodic payment

r - rate per period

n - number of periods

11,000 = P*[\frac{(1-(1+0.1)^{-10})}{0.1}]

P = $1790.01

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<span>Answer:
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3 0
3 years ago
Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 3.5%; scenar
lys-0071 [83]

Answer:

2. 20 years under scenario A, versus 16 years under scenario B

Explanation:

It is clearer if I explained with an example:

Let suppose that a nation´s real GDP for 2018 was 1000. In scenario A you will have:

2019:1000*3.5%=1035

2020:1035*3.5%=1071,2

and so on, the same for scenario B

2019: 1000*4,5%= 1045

2020: 1045*4,5%= 1092

and so on.

I attached an excel table where you can see that: in the first scenario, between year 20 and 21 (2038 and 2039) the GDP will double and in the second one, between year 15 and 16 GDP will double. The answer is 2.

4 0
3 years ago
When the Federal Reserve sells government securities on the open market, what effect does this action have on the nation's
lukranit [14]

Answer:

Money Supply - Decreases / Interest Rates - Increase

Explanation:

Open market sells are contractionary monetary policy measures that aim are reducing inflationary pressures. The Federal reserves undertake monetary policy to achieve stable prices and steady economic growth.

Open market operations involve the Fed selling treasury bills to the banks and other financial institutions. The banks are expected to pay for the treasury bills using customers. Usually, banks issue out the customer deposits to firms, and households are loans. Open market sales results in banks unable to issue out many loans as most of the customer deposits are used to pay for the treasury bills. Banks will have limited cash for loans leading to a decrease in the money supply. Demand for loans exceeds supply resulting in an increase in interest rates.

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4 years ago
Capabilities are defined as a company's Group of answer choices skills at coordinating resources and putting them to productive
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Capabilities are defined as a company's Skills as coordinating its resources and putting them to productive use.

A person or thing has the ability to perform something, according to the definition of a capability. This is an instance of when someone has the capacity to cook when they are able to cook. The ability of a computer to open a file is demonstrated, for instance, when the computer can do so.

The volume and quality of labor that a person is capable of performing determines their capacity.... a job that was beyond the scope of one man.... the director's expectations of the actor's capacity.

Learn more about capability here brainly.com/question/25645043

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7 0
2 years ago
Suppose Darnell and Eleanor are playing a game in which both must simultaneously choose the action Left or Right. The payoff mat
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Answer: a) Eleanor picks Left as Dominant strategy

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Explanation:

The Dominant strategy is that strategy that once embarked on, gives the highest benefit irrespective of what the other player does.

The Dominant strategy therefore is for ELEANOR to pick LEFT. Should Eleanor pick left, they stand a chance to gain 5 if Darnel picks Left as well and 3 if Darnel picks Right. This is better than picking Right because there Eleanor has a chance of a Payoff of 2.

The Nash Equilibrium of a game is the point where both players are at their best alternative meaning that it is beneficial to both of them to remain where they are.

With Eleanor always picking Left, it would be beneficial for Darnel to pick Left as well and make a Payoff of 6 which is the highest they can make with Eleanor picking Left.

The Nash equilibrium in this game is as follows: DARNEL chooses LEFT and ELEANOR chooses LEFT.

7 0
3 years ago
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