Answer:
$ 3,085
Explanation:
Given that;
The present value(PV) ------ ???
Future payment (F) ---- $5,000
The annual effective rate are 4%, 5% and 5.5% respectively, which can be illustrated as;
r = 0.04, 0.05 and 0.055 respectively.
The present value formula is given as:
PV = 5000 × (1.04)⁻³(1.05)⁻²(1.055)⁻⁵
= $ 3,084.814759
≅ $ 3,085
Answer:
$0
Explanation:
Data provided in the question
Borrowed amount from the bank = $90,000
Annual interest rate = 8%
Maturity date = March 31, 2019
Since it is mentioned in the question that, the interest and the principal were paid in cash on the maturity date so for the amount of cash that Abardeen had to pay for 2018 interest would be zero as the principal and the interest is paid for 2018
The current value of the payment which is $1000 will be:
A=P(1+r/100)^-n
P=1000
r=5 %
n=1
A=1000(1+5/100)^-1
A=1000/1.05
A=$952.38
The first payments of $1000 is worth $952.38 today. The value of the second $1000 is worth:
A=1000(1+0.05)^-2=907.02
today
Answer:
The correct answer is letter "A": be driven to a lower price.
Explanation:
Typically, when there is a producer to producer competition, the competing companies tend to <em>lower </em>their product prices. This happens because of the belief consumers are mainly price driven at the moment of discriminating in choosing to buy one good over another. Though, it allows consumers to at least have a couple of sources from where to choose at a fair price.
