The price of mangoes is currently $5.00 per pound. At this price, producers are supplying 4,000 pounds of mangoes. Point C on th
e graph shows the current equilibrium price and quantity. To which point will the equilibrium shift if the demand increases suddenly because of a non-price determinant of demand?
2 answers:
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Answer:
$12,015 approx.
Explanation:
To calculate present value of a future amount, the future amount is discounted at the rate of interest for the period of investment, which reveals present value as on today. The technique is referred to as discounting technique.
Suppose P denote the amount invested today, which when matured after period of two years yields $13500. Following formula is used for calculating the money invested:
wherein, A = Amount
P = Principal
R = Rate of interest
n = number of years
13,500 = 1.1236 P
⇒ P = 12,015 Approx.
Thus, $12015 is required to be deposited today so as to yield $13,500 after 2 years compounded at 6% per annum rate of interest.
Answer: The cost of non-free trade credit is 23.45%
We follow these steps to arrive at the answer
We have:
Discount Rate 2%
First we find .
Adding 1 to the number above we get 1.020408163
Next we'll find the number of extra credit days after the discount period.
Next we need to raise 1.020408163 to the fraction of 365/35. We get
Finally we need to deduct 1 from the number above to get
We express the number above as a percentage to arrive at the cost of non-free trade credit.