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iris [78.8K]
3 years ago
15

Peter Lynchpin wants to sell you an investment contract that pays equal $22,500 amounts at the end of each of the next 20 years.

If you require an effective annual return of 8 percent on this investment, how much will you pay for the contract today?
Business
1 answer:
Effectus [21]3 years ago
7 0

Answer:

The amount to be paid for the contract today = $220,908.32

Explanation:

<em>The amount to be paid for the contract today will be equal to the present value of the annuity of $22,500 payable for 20 years discounted at a rate of 8% per annum.</em>

Present Value = A ×( 1 - (1+r)^(-n))/r

A- 22,500, r- rate of return - 8%, n -no of years 20 years

PV = 22,500 ×( 1-(1.08)^(-20) )/ 0.08

PV = 22,500 ×9.8181

PV = $220,908.32

The amount to be paid for the contract today = $220,908.32

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The free market idea is generally associated with which economic system?
ehidna [41]

Answer:

The term “free market” is sometimes used as a synonym for laissez-faire capitalism. When most people discuss the “free market,” they mean an economy with unobstructed competition and only private transactions between buyers and sellers.

hope this helps

7 0
3 years ago
To what extent, if any, are marketers responsible for injurious consumption involving their product?
Licemer1 [7]

Injurious consumption is negative in nature and not good at all for a person.

Utilizing resources to meet immediate needs and desires is known as consumption. It is contrasted with investing, which entails making purchases in order to acquire future revenue. Consumption is a key idea in economics and is also explored in a wide range of social sciences. Consumption is defined differently by various economic schools. Mainstream economists believe that only the final purchase of newly produced goods and services by individuals for immediate use qualifies as consumption; all other types of expenditure, including government spending, fixed investment, and intermediate consumption, are classified as separate categories (see Consumer choice). Many other economists define consumption as the whole of all economic activity that does not involve the creation, manufacturing, or selling of products and services.

learn more about consumption:

brainly.com/question/14933604

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4 0
1 year ago
) A company sells a software suite that includes a word processor and spreadsheet applications. The suite sells for $250 and the
DIA [1.3K]

Answer:

Allocated to the the word processing products would be$80

To the spreadsheet would be allocated revenues for $170

Explanation:

In order to calculate how much of the $250 revenue from the bundled product sale would be allocated to the the word processing products we would have to use the following formula:

allocated to the the word processing products= sold price suits- spreadsheet price

allocated to the the word processing products= $250-$170

allocated to the the word processing products=$80

To the spreadsheet would be allocated revenues for $170

7 0
3 years ago
If the cpi increases from 250 to 275 for one year, the rate of inflation for that year is
hjlf
<span> the rate of inflation for that year is 10%

To calculate the rate of inflation for that year, we need to use this formula:

Rate of inflation =  (CPI2 - CP1) /  CPI1

Rate of inflation = (275 - 250) / 250

Rate of inflation = 25 / 250

Rate of inflation = 1 / 10

Rate of inflation = 10 %</span>
7 0
3 years ago
All of the following choices adhere to the NASAA Model Rule on Unethical Business Practices of Investment Advisers and Federal C
deff fn [24]

Answer:

[C] decides to borrow funds with a promissory note in writing from an individual client.

Explanation:

NASSA Model Rule on Unethical Business Practices of Investment Advisers and Federal Covered Advisers stimulates that an investment adviser could borrow money from either the shareholder or institutional lending facility. However, an investment adviser can not borrow money from an individual client. Therefore, the correct is the option [C].

4 0
3 years ago
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