1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
DerKrebs [107]
2 years ago
11

Assume you are saving $1,000 by depositing into a bank CD account with one year until maturity. The interest rate on your deposi

t is 10% and inflation is expected to be 4% over the next year
a. How much money will you have in your bank account at the end of one year?

b. What is the real interest rate you expect to earn on your deposit over the next year?

c. If you are saving for a gaming computer that currently sells for $1,090, will you have enough money from the savings to buy it next year?
Business
1 answer:
mina [271]2 years ago
7 0

The amount of money that I would have in the bank account at the end of one year is $1,100.

The real interest rate I would expect to earn on the deposit is 6%.

If I am saving for a gaming computer, at the end of next year I would have enough money.

<h3>What is the value of the money by next year?</h3>

The formula that can be used to determine the money in my bank account next year is:

FV = P (1 + r)^n

Where:

FV = Future value

P = Present value

R = interest rate

N = number of years

1000 x (1.1)^1 = $1,100

<h3>What is the real interest rate?</h3>

The real interest rate is the nominal interest rate less inflation rate.

The real interest rate = 10% - 4% = 6%

To learn more about future value, please check: brainly.com/question/18760477

You might be interested in
Assume the world market for oil is competitive and that the marginal cost of producing​ (extracting and bringing to​ market) ano
xz_007 [3.2K]

Answer:

The economic surplus will decrease by $2.20

Explanation:

$81.40 and $79.20 are <em>marginal </em>cost and benefit, which are the changes to total costs and total benefits due to producing and consuming one additional barrel of oil.

They can be used to calculate <em>change </em>to economic surplus, which is the change to the net economic value received by society, which is given by:

marginal benefit - marginal cost = $79.20 - $81.40 = - $2.20

7 0
3 years ago
Which of the following is an example of a hidden variable? Quality of life is a hidden variable because it cannot be measured di
My name is Ann [436]

Answer:

<u>Quality of life is a hidden variable because it cannot be measured directly but must be inferred from measurable variables such as wealth, success, and environment. </u>

Explanation:

<u>Hidden variable:</u> The term "hidden variable" is described as the proposition that specific "statistical models" of any physical systems, for example, Quantum mechanics are being incomplete inherently, and along with this the apparent randomness of a particular system is being dependent not on "collapsing functions" but instead it is due to any unmeasurable or unseen or hidden variables.

8 0
3 years ago
What is a foreign exchange rate?
ziro4ka [17]
Difference between the Us Dollar. 1 US dollar is .86 Euro
7 0
3 years ago
Read 2 more answers
Which of the following is a PRE-READING activity designed to help build reading comprehension
kondaur [170]
I think the correct answer would be the second option. Paraphrasing the ideas within a document is an activity that would help building reading comprehension. Paraphrasing ideas would require one to understand the context of the sentence so that you can write it in your own way so in a way it helps comprehension.<span />
7 0
3 years ago
what is the present value of the following cash-flow stream if the interest rate is 6%? note: do not round intermediate calculat
Anettt [7]

The present value of the cash-flow stream if the interest rate is 6% is $323.03.

<h3>What is the interest rate?</h3>

The interest rate can be defined as the amount or the percentage that is being fixed or fluctuating depending upon the condition of the agreement. The interest is calculated on the amount that is being loaned or given to the individual or a company.

According to the given question, the interest rate is 6%

1st year $120

2nd year $320

3rd year $220

Now, by applying the formula for the present value:

\rmPV = \dfrac{fv}{(1 + r)^t}

\dfrac{120}{1.06} +  \dfrac{320}{(1.06)^2} + \dfrac{220}{(1.06)^3}

= 113.20 + 284.96 + 184.87

= 323.03

The present value of the cash flow stream is $323.03

Learn more about  interest rate, here:

brainly.com/question/14445709

#SPJ4

7 0
1 year ago
Other questions:
  • The use of activity-based costing information to support the decision-making process is known as:
    11·1 answer
  • Liam, the art director at Impact Advertising, has decided to lay off a production assistant due to the loss of a major client. W
    10·1 answer
  • The cost of goods sold for mcpherson fashions is $360,000. the beginning inventory for the firm was $20,000. twelve months later
    11·1 answer
  • Duress is a possible ground for rescission of a contract.​<br><br> a. true<br><br> b. fals
    10·1 answer
  • There is a 15 percent probability the economy will boom; otherwise, it will be normal. Stock G should return 15 percent in a boo
    5·1 answer
  • The forcing mode is one in which the project manager deemphasizes or avoids areas of differences and emphasizes areas of agreeme
    5·1 answer
  • Franklin Aerospace has a quick ratio of 2.00x, $36,225 in cash, $20,125 in accounts receivable, some inventory, total current as
    12·1 answer
  • Assume a purely competitive, increasing-cost industry is in long-run equilibrium. If a decline in demand occurs, firms will:leav
    5·1 answer
  • Match each type of lending institution to its description.
    15·1 answer
  • In cultures that are high in uncertainty avoidance,————-
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!