Answer:
$894.65
Explanation:
Given data:
n= time = 10 years
par value= $1000
annual coupon = 5.5%
interest rate = 7.0%
bond price = present value of interest + present value of redemption value.
present value of interest:
C = 5.5% of 1000 = $55
PV = C x (1 - (1 + r)^(-n)/r
PV = 55 x 1.07^(-10)/0.07
PV = 386.3
present value of redemption value:
pv = f / (1 + r)^(n)
where f = par value
PV = 1000 / (1.07)^(10)
PV = 508.35
summing up both values
508.35 + 386.3
= $894.65
The ability to forecast cause and effect is crucial for a solid economic model since it enables it to both explain past events and foresee potential future ones.
A model of the economy's importance
Its main goal is to describe and examine the prices and volume sold in a market that is competitive. In relation to price and other factors, the equations of the model define the level of supply and demand (for example, income).
What conclusions do economic models draw?
A simplified representation of reality, an economic model enables us to observe, comprehend, and forecast economic phenomena. A model's goal is to simplify a complex, real-world scenario so that only the most important elements remain.
To know more about economic model
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Answer:
Scalability
Explanation:
Scalability is the ability to increase or decrease resources for any given workload.
- When the resource is increased by the addition of more resources to service a workload, it is known as Scaling Out.
- When the resource is decreased by the reduction of resources to service a reduced workload, it is known as Scaling In.
- When additional capabilities is added to manage an increase in demand to the existing resource , it is referred to as Scaling Up.
- Likewise, when capabilities is reduced to manage a decrease in demand to the existing resource , it is referred to as Scaling Down.
Scaling does not have to be done automatically.
