Answer:
Their income after 20 years would be 72,550 dollars.
Explanation:
The income after 20 years can easily de determin by using compounding
formula
Future Value = Present Value (1 + I)^ 20
= 90,000 (1 + 0.03)^ 20
= 162,550 dollars
Income can be determing by subtracting Pv from Fv i.e
Income = 162,550 - 90,000 = 72,550
Calculation on excel sheet
A B C D
1 90,000 1.03 = A1 * 1.03 = C1-A1
2 = D1 1.03 = A2 * 1.03 = C2-A2
20 = D19 1.03 = A20 * 1.03 = A20 - C20
* In work sheet colunm D will show income on investment.
Answer:
(a) Trace the effect of this change through three banks- First National, Second Federal, and Third State.
Antonia deposits $2,000 in First National Bank.
Then First national Bank lends $1,600 to client X that uses the money to purchase something. The seller of that something deposits the money In Second Federal Bank.
Second Federal Bank then lends $1,280 to client Y that decides to use that money to pay his rent. Client Y's landlord then deposits the money in Third State Bank.
Third State Bank will then lend $1,024 to client Z...
(b) How much money will be generated in this banking system?
total money generated in the banking system = Antonia's deposit x money multiplier
money multiplier = 1 / required reserve rate = 1 / 0.2 = 5
so the total money generated = $2,000 x 5 = $10,000
Answer:
First option is the right choice.
Explanation:
He will not have as much money for college classes, because he will have to pay for the trailer and its maintenance.
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