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Margaret [11]
3 years ago
6

Live Forever Life Insurance Co. is selling a perpetuity contract that pays $1,500 monthly. The contract currently sells for $115

,000.
a. What is the monthly return on this investment vehicle?
b. What is the APR?
c. What is the effective annual return?
Business
1 answer:
vfiekz [6]3 years ago
5 0

Answer:

1.30%

15.60%

16.77%

Explanation:

The monthly return is the amount payable monthly divided  by the current price of the investment vehicle.

monthly return=$1500/$115,000=1.30%

Annual percentage return=monthly return*12=1.30% *12=15.60%

Effective annual return=(1+1.30%)^12-1

EAR=1.167651776 -1

EAR=16.77%

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Dahasolnce [82]

Answer:

Section A = $27,000

Section B = $14,800

Section C = $12,200

Explanation:

In this question,we have to assume the things

Like - Let the number of seats in section B be X and, in Section C be Y

So, Section A = Section B + Section C

That means, Section A = X + Y            

And, Section A + Section B + Section C = $54,000

Means, X + Y + X + Y = $54,000

           2X + 2Y = $54,000

So,       X + Y = $27,000

And, the other equation is 20X + 15Y = $1,54,000 - 25 × 27,000

So, the both equation is

 X + Y = $27,000

20X + 15Y = $479,000

Now multiply 20 in equation 1

So,

20X + 20Y = $540,000

20X + 15Y = $479,000

Now deduct the equation 1 from equation 2

So, the value would equal to

5Y = $61,000

Y = $12,200

X = $27,000 - $12,200 = $14,800

And, the Section A = X + Y = $27,000

5 0
3 years ago
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Gasoline and bicycles are complements in consumption. Suppose we increase the federal gasoline tax to $1 per gallon. What are th
dalvyx [7]

Answer: A

Explanation:

A complementary good is a product that is used together with another product. Without its complement, such a good will have little value. When there is increase in the price of a particular product, the demand of its complement reduces because consumers may not be able to use the complement on its own.

Complements have negative cross elasticity of demand i.e there is increase in the demand for a product when the price of its complement reduces. If bicycles and gasoline are complements, an increase in tax on gasoline will have a negative effect on the demand for bicycle. Due to the price increase of gasoline, less people will demand for bicycle. The initial change that will occur as a result of this is that as there is a price increase for gasoline, there will be a leftward shift in the demand for bicycle. This implies that less bicycle will be demanded for.

7 0
4 years ago
Decide whether each of the following descriptions most closely corresponds to being part of a command system, a market system, o
Lady_Fox [76]

Answer:

a. Command system

b. Market system

c. Laissez-faire system

Explanation:

a. Command System, This is an economic system where the means of production and distribution of goods and services are owned and control by the government, in this system, the economic activities are controlled by a central planning committee.

b. Market system: A market system is an economic system where the market forces, that is the forces of demand and supply allocate resources.

c. Laissez-faire system : Under the Laissez-faire system is an economic system in where there is minimum government intervention in the economy. sometimes the words Laissez-faire system and capitalism are used interchangeably. The major difference between capitalism and laissez faire depends on the extent of government interference in the economy.

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Answer:

Option (a) is correct.

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Therefore, this will make the countries more specialized and there is an exchange of goods among the trading nations.

Each country is then specialized in the production of a good in which it has a comparative advantage and hence, the joint output of the trading nations increases.

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When an existing patent expires and the generic producers enter the market, the price reduces due to an increase in the supply of the erstwhile patented drug. This will reduce the monopoly profit of incumbent producers. Therefore, they will seek to deter the entry of generic drug makers in order to safeguard their monopoly profits and price.

Therefore, incumbents were willing to give enough to potential entrants so as to make them delay entry to charge a monopoly price.

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