<span>Annual = Years = 6.64; Actually 7 years
Monthly = Years = 6.33; 6 Years, 4 months
Daily = Years = 6.30; 6 Years, 111 days
Continuously = 6.30; 6 Years, 110 days
The formula for compound interest is
FV = P*(1 + R/n)^(nt)
where
FV = Future Value
P = Principle
R = Annual interest rate
n = number of periods per year
t = number of years
For this problem, we can ignore p and concentrate on the (1+R/n)^(nt) term, looking for where it becomes 2. So let's use this simplified formula:
2 = (1 + R/n)^(nt)
With R, n, and t having the same meaning as in the original formula.
For for the case of compounding annually
2 = (1 + R/n)^(nt)
2 = (1 + 0.11/1)^(1t)
2 = (1.11)^t
The above equation is effectively asking for the logarithm of 2 using a base of 1.11. To do this take the log of 2 and divide by the log of 1.11. So
log(2) / log(1.11) = 0.301029996 / 0.045322979 = 6.641884618
This explanation of creating logarithms to arbitrary bases will not be repeated for the other problems.
The value of 6.641884618 indicates that many periods is needed. 6 is too low giving an increase of
1.11^6 =1.870414552
and 7 is too high, giving an increase of 1.11^7 = 2.076160153
But for the purpose of this problem, I'll say you double your money after 7 years.
For compounding monthly:
2 = (1 + R/n)^(nt)
2 = (1 + 0.11/12)^(12t)
2 = (1 + 0.009166667)^(12t)
2 = 1.009166667^(12t)
log(2)/log(1.009166667) = 0.301029996 / 0.003962897 = 75.96210258
And since the logarithm is actually 12*t, divide by 12
75.96210258 / 12 = 6.330175215
Which is 6 years and 4 months.
For compounding daily:
2 = (1 + 0.11/365)^(365t)
2 = (1 + 0.00030137)^(365t)
2 = 1.00030137^(365t)
log(2)/log(1.00030137) = 0.301029996 / 0.000130864 = 2300.334928
2300.334928 / 365 = 6.302287474
Continuously:
For continuous compounding, there's a bit of calculus required and the final formula is
FV = Pe^(rt)
where
FV = Future value
P = Principle
e = mathematical constant e. Approximately 2.718281828
r = Interest rate
t = time in years
Just as before, we'll simplify the formula and use
2 = e^(rt)
Since we have the function ln(x) which is the natural log of x, I won't bother doing log conversions.
rt = ln(2)
0.11 * t = 0.693147181
t = 0.693147181 / 0.11
t = 6.301338005</span>
Answer: The answers are given below
Explanation:
a. What is its percentage rate of return?
From the question, we are told that the firm is earning $5.50 on every $50 invested by its founders. The percentage of return will now be:
= $5.50/$50 × 100%
= 0.11 × 100%
= 11%
b. Is the firm earning an economic profit? If so, how large?
The economic profit will be the difference that exists between the percentage of return which is 11% and the normal rate of profit which is 5%. This will be:
= 11% - 5%
= 6%
The firm is earning economic profit of 6%.
c. Will this industry see entry or exit?
There will be entry into the industry. This is because the percentage of return which is 11% is greater than the normal rate of profit which is 5%.
d. What will be the rate of return earned by firms in this industry once the industry reaches long-run equilibrium?
The rate of return earned by firms in this industry once the industry reaches long-run equilibrium will be 5% which is the normal rate of profit in the economy.
Answer: A target price for farm crops is an example of price floor because it’s fixed ahead of harvests with the interest of farmers in mind.
Explanation: A quick definition of both concepts would be of help. A price floor is usually fixed by government legislation and it ensures that the price of a commodity or service does not fall below a certain minimum. In the case of farm crops, a floor price makes sure that the farmers are guaranteed a level of profit in case there is poor harvest for any reason whatsoever. The price floor must be fixed above the equilibrium price for this to be effective.
A target price is an expectation of the future price of commodities or services, and hence prices are fixed ahead of the harvest in the case of farm crops. This is so because as explained earlier, future conditions might change and become unfavorable, therefore making the current market price unprofitable for farmers. If for example, a sack of potatoes currently sells for $30, the government may fix the price floor ahead of the harvest season at $45 per sack. This implies that after harvesting farmers can still sell at $30. However if the harvest turns out to be bad perhaps due to natural disasters, pests or fungal attacks, etc, then the farmers can go ahead and sell at $45 and possibly higher. No farmer is allowed to sell below $45 (since that is the ‘floor’). That way, farmers would still have some profit guaranteed and would be encouraged to remain in the farming business.
Answer: I decreases; II decreases; III decreases
Explanation:
Debt Covenants becoming more restrictive means that less people want to borrow money. This shifts the demand curve to the left and this Decreases interest rates.
The Fed increasing money supply means that there is more money in the economy. This shifts the supply curve to the right thus having the effect of reducing Interests rates as there is more money available for loans.
Total Household Wealth increasing means that Households have less of an incentive to borrow money. This reduces the demand for interest rates so interest rates decrease.
Answer:
i think that this the first step for meme domination and how it will be the future currency for the republic of the memers
and also a great leap for the dogs of the united doggys
we will not just take it to the moon but to mars as a meaing of human and dog friendship
Explanation:
dont take it to the moon put it in your closet for your childs to seal for lots of money
