Answer:
Explanation:
Antonio used the value of money as a unit of account to compare the value of the two cars namely Super and Duper and come to the conclusion that Duper was cheaper to Super
Antonio saved $ 4000 in his checking account which he gave to the seller. This represent money's role as a store of value
Antonio write a check of the money he saved to the seller and the seller accepted it and gave him the car which fulfill the role of money as a medium of exchange.
Answer:
$855,903.20
Explanation:
Real discounting rate=> i= [i'-f]/[1+f]. Where i is the real interest rate. i' is the nominal interest rate which is given as 5% and f is the rate of inflation
i = (5%-3%)/1+3%)
i = 2/1.3
i = 1.94%
Her after tax earnings = 45,000*(1-0.15) = $38,250
Personal consumption = 25% of this, 38,250*0.75 = $28,688.
We are discounting her earnings back 45 years at 1.94%. The equation will be: 28,688 * {1-(1+0.01940)^-45} / {0.01940}
= 28,688 * {1 - 0.42120322099] / 0.01940
= 28,688 * 29.83488551597938
= 855903.1956824165
= $855,903.20
So, the amount of life insurance necessary for Jenny using the Human Life Value method is $855,903.20
