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spin [16.1K]
3 years ago
11

You will receive $5,000 a year in real terms for the next 5 years. Each payment will be received at the end of the period with t

he first payment occurring one year from today. The relevant nominal discount rate is 9.625 percent and the inflation rate is 2.3 percent. What are your winnings worth today in real dollars?
Business
1 answer:
allochka39001 [22]3 years ago
7 0

Answer:

$20,413

Explanation:

The computation of real dollars is given below:-

= [(1 + nominal rate) ÷ (1 + inflation rate)] - 1

= [(1 + 0.09625) ÷ (1 + 0.023)] - 1

= 1.071603 - 1

= 0.071603

= 7.1603%

So, the Present value

= Annuity × [1 - 1 ÷ (1 + rate of interest)number of years] ÷ rate of interest

= 5,000 × [1 - 1 ÷ (1 + 0.071603)5] ÷ 0.071603

= 5,000 × 4.082659

= $20,413

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The correct answer is option c.

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A reduction in deposits liabilities will further cause a reduction in the total reserves of the bank. Consequently, it will cause a decrease in the money supply. In this way, the federal reserve bank can curb inflationary pressures.

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A company deposits $3500 in a bank at the end of every year for 12 years. The company makes no deposits during the subsequent 8
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FV= $94,108.42

Explanation:

<u>First, we need to calculate the future value of the 12 annual deposits:</u>

FV= {A*[(1+i)^n-1]}/i

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4 0
3 years ago
Hot Shot Delivery Inc. provides the following year end data:
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c. 42.6%

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According to my research on different types of entrepreneurs, I can say that based on the information provided within the question Nicole is an internal entrepreneur. This term is defined as a person within a large corporation who is taking a direct approach for turning an idea into a profitable finished product, usually by being assertive and pushing through organizational obstacles.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

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3 years ago
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