Answer: I must invest <u>$85424.14</u> today in order to buy a Ferrari nine years from now on the day I turn 30.
We have
Price of the Ferrari nine years from now (Future Value - FV) $215000
Expected Rate of return on the mutual fund (r) 10.8%
Time until I turn 30 (n) 9 years
We can calculate the Present Value (PV) or the money to be invested today as
Answer:
(c) 7.5 bars, 2/15 shirts
Explanation:
Opportunity cost is simply defined as the next best alternative.
Opportunity cost also refers to the loss of foregone gain which could have resulted had a non chosen option been selected over the chosen option. For instance, the opportunity cost of storing money at home is the average market rate of interest which would've been earned had the same money been invested.
In the given question, the opportunity cost of a t shirt would be :
= 
= 7.5 protein bars
Similarly, the opportunity cost for a protein bar would be:
= 
= 
Thus, the correct option is (c) 7.5 bars, 2/15 shirts
Answer:
$8,000
Explanation:
Data provided in the question:
Average cost of car = $25,000
Now,
Using the class recovery system of five years,
The rate of depreciation expense in year 2 of the MACRS is 32%
Therefore,
The depreciation expense in the year 2 will be
= Average cost of car × Rate of depreciation
= $25,000 × 32%
or
The depreciation expense in the year 2 = $8,000
Answer: The capital and financial account is the record of the United States minus us investment abroad.
Explanation: This account will record the balance of all payments for a country's international transactions with the rest of the world. The transactions are recorded in two different accounts, the current account and the capital and financial account.
Answer:
Money multiplier for this economy is 5
Explanation:
Initial bank reserves = reserve deposit ratio * $500 = 0.2 * $500 = $100
1) increase in bank reserves by $1 , bank reserve deposit increases from $500 to $101 / 0.2 = $505 and the money supply increases by $505 - $500 = $5
2) increase in bank reserves by $5 , bank reserve deposit increases from $500 to $105 / 0.2 = $525 and the money supply increases by $525 - $500 = $25
3) increase in bank reserves by $10 , bank reserve deposit increases from $500 to $110 / 0.2 = $550 and the money supply increases by $550 - $500 = $50
as money supply rises by 5 times the increase in bank reserves , the money multiplier in this economy is 5.
