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Homework answers / question archive / 1) what is the future worth of $547 in year 1 and amounts increasing by $72 per year through year 5 at an interest rate of 10% per year? QUESTION 6 10 points Save Answer Find the present worth of $2,994 in year 1 and amounts increasing by 10% per year through year 5
1) what is the future worth of $547 in year 1 and amounts increasing by $72 per year through year 5 at an interest rate of 10% per year? QUESTION 6 10 points Save Answer Find the present worth of $2,994 in year 1 and amounts increasing by 10% per year through year 5. Use an interest rate of 12% per year
2)Q1:/ Fill the blanks with a suitable word/ words:
Mathematical method is an approach to ………………….. in which the economist use the…... ……………………… in statement of the problem and also use the known …………………… in reasonable analysis of …………………... (analysis can be at ……….. or …………… theory.
Q2.Consider the national income model:
Y = C + I0 + G0 + (X0 − M) … … . . … . (1)
C = a + byd, (a > 0,0 < b < 1) … … . (2)
Yd = Y − T … … … … … … … … … … … . . . (3)
T = T0 + ty … … … … … … … … … … … . . (4)
M = M0 + my … … … … … … … … … … . . (5)
Where: (T) = taxes, (t) = income tax rate
Identify: 1/ Endogenous variable(s).
2/ Exogenous variable(s).
3/ Conditional equation.
4/ Behavioral equations.
5/ Definitional equation.
6/ Constants., give the Economic meaning of them.
7/ Coefficients. give the Economic meaning of them.
3) The discount rate and the federal funds rate The discount rate is the interest rate on loans that the Federal Reserve makes to banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A higher discount rate banks' incentives to borrow reserves from the Federal Reserve, thereby the quantity of reserves in the bariking system and causing the money supply to The federal funds rate is the interest rate that bariks charge one another for short-term (typically overnight) loans. When the Federal Reserve uses open-market operations to buy government bonds, the quantity of reserves in the banking system , banks' need to borrow from each and the federal funds rate other Grade It Now Save & Continue Continue without saving
4)explanation of your selected industry’s market structure, including support for your assertion. In your explanation, also address the following:
The company that I chose to talk about was a grocery store. I believe it falls under monopolistic competition.
5)A committee on community relations in a college town plans to survey local businesses about the importance of students as customers. From telephone book listings, the committee chooses 50 businesses at random. Of these, 28 return the questionnaire mailed by the committee. Identify the population and the sample for this study. The population is all students in the college town and the sample is the 50 local businesses to whom the questionnaire was sent. The population is all local businesses and the sample is the 50 to whom the questionnaire was sent. The population is the 28 businesses who responded to the questionnaire and the sample is all local businesses. The population is the 50 local businesses to whom the questionnaire was sent and the sample is the 28 who responded. What is the rate (percent) of nonresponse? (Use decimal notation. Give your answer as an exact number.) (Alt + A) nonresponse rate: %
1)
In order to find future worth of cash flows each year we need to multiply the cash flow each year by interest rate for the number of years left.
Therefore, for year 1 :
Cash flow = $ 547
We need to find future worth of this cash flow at year 5 with interest at 10% per year
Hence its future worth will be - $547 * (1.10)^5 = $880.95
Also, the cash flow is increasing by $72 per year
Therefore, the cash flows for all 5 years will be :
Year 1 = $547
Year 2 = $547 + $72 = $619
Year 3 = $619 + $72 = $691
Year 4 = $691 + $72 = $763
Year 5 = $763 + $72 = $835
The calculation of future worth of all cash flows is given in the table below :
| Year | Amount | Interest @10% | Future Value |
| 1 | $547.00 | 1.61 { (1.1)^5 } | $880.95 |
| 2 | $619.00 | 1.46 { (1.1)^4 } | $906.28 |
| 3 | $691.00 | 1.33 { (1.1)^3 } | $919.72 |
| 4 | $763.00 | 1.21 { (1.1)^2 } | $923.23 |
| 5 | $835.00 | 1.10 | $918.50 |
| Total Future Value | $4,548.68 |
Hence, the future worth of $547 in year 1 and the amounts increasing by $72 per year through year 5 at an interest rate of 10% per year will be $ 4,548.68
Answer (6) :
In order to find present worth of cash flows each year we need to divide the cash flow each year by interest rate for the number of years passed.
Therefore, for year 1 :
Cash flow = $ 2994
We need to find present worth of this cash flow at year 0 with interest at 12% per year
Hence its present worth will be - $2994 / 1.12 = $ 2673.21
Also, the cash flow is increasing by 10% per year
Therefore, the cash flows for all 5 years will be :
Year 1 = $2994
Year 2 = $2994 + 10% of 2994 = $3293.40
Year 3 = $3293.40 + 10% of 3293.40 = $3622.74
Year 4 = $3622.74 + 10% of 3622.74 = $3985.01
Year 5 = $3985.01 + 10% of 3985.01 = $4383.52
The calculation of present worth of all cash flows is given in the table below :
| Year | Amount | Interest @12% | Present Value |
| 1 | $2,994.00 | 0.89 { 1/(1.12) } | $2,673.21 |
| 2 | $3,293.40 | 0.80 { 1/(1.12)^2 } | $2,625.48 |
| 3 | $3,622.74 | 0.71 { 1/(1.12)^3 } | $2,578.59 |
| 4 | $3,985.01 | 0.64 { 1/(1.12)^4 } | $2,532.55 |
| 5 | $4,383.52 | 0.57 { 1/(1.12)^5 } | $2,487.33 |
| Total Present Value | $12,897.16 |
Hence, the present worth of $2994 in year 1 and the amounts increasing by 10% per year through year 5 at an interest rate of 12% per year will be $ 12,897.16
2)
1.) Mathematical method is an approach to theories in which economist use the testable propositions in statement of the problem and also use the known methods in reasonable analysis of positive claims.(analysis can be at calculus and matrix algebra theory).
2.)
Endogenous variables - Y ,C
Exogenous variable - t(income tax rate)
Conditional equation- Y=C+I0+G0+(X0-M)
Behavioral equation-T0-ty
Definitional equation- GDP=C+I+G+(X-M)
Constants- A Constant is a magnitude that does not change.When a constant is joined to a variable,it is often referred to as the coefficient of that variable.
Coefficients- A numerical or constant quantity placed before and multiplying the variable in an equation.
3)Please use this google drive link to download the answer file.
https://drive.google.com/file/d/1jP7jQPdtRjbdtZ_HX-n38VZ4tRSegx59/view?usp=sharing
Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process.
https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link
4)
- We will analyse here grocery store which falls under monopolistic competition kind of market structure. The most distinctive factor in monopolistic competition is product differentiation.This market structure is portrayed by numerous organizations selling a differentiated product in a market that is anything but difficult to enter. Aside from the separated product, this market structure is like perfect competition. The organizations sell products which are by one way or another separated, however are close substitutes for one another. This implies each firm will confront a descending inclining demand curve for its product and this is the monopoly part of monopolistic competition. The firm can raise its price and not lose the entirety of its clients. Nonetheless, the demand for its product will in general be moderately versatile since there are so many close substitutes accessible in the market. A firm that raises its price will hold a few clients out of steadfastness for its image. However, huge numbers of its clients will choose to change to a contender's image if the price climb is huge. The best instances of monopolistic competition are given by retailing in metropolitan regions. Grocery stores, service stations, cafés are generally instances of firms in markets which estimated monopolistic competition.
- The firm under monopolistic competition, like the oligopolist and monopolist, must settle on choices about price, the degree of yield, the degree of selling exertion (or publicizing) and about the product itself. Consequently, nonprice competition will be a significant piece of monopolistic competition also.
- In the short run, the monopolistically serious firm will boost benefits by setting minimal income equivalent to minor expense. Since the demand bend for the firm is descending slanting, price will surpass minimal expense for the firm. In this regard, the short run benefit boosting choice is essentially equivalent to for a monopolist (or an oligopolist).
- Over the long term, the way that passage is simple will prompt outcomes like perfect competition. On the off chance that monopolistically serious firms are acquiring monetary benefits, different firms will in general enter the market. The demand curves of the current firms will move descending as different firms enter, diminishing benefits until just ordinary benefits are earned, a cycle like what was portrayed in the past section for unadulterated competition.
- Notwithstanding, the last harmony isn't indistinguishable from the firm under unadulterated competition. Since the demand bend is descending inclining, price will at present be above minimal expense for the monopolistically serious firm over the long haul. So firms are delivering not exactly the allocatively proficient degrees of yield. They additionally will in general create at a lower yield than where the base of their normal expense of production happens. That is, the organizations have some overabundance limit that isn't by and large successfully.
- The practically unfilled grocery store or eatery on Mondays and Tuesdays are genuine instances of the higher capacity and excess supply. Nonetheless, it happens that the excess supply is essentially because of the descending slanting demand bend of the firm and the negative incline of the demand bend is a consequence of product separation. To the degree that customers are eager to pay somewhat more to have a selection of products, at that point the overabundance limit is, maybe, not very wasteful.
5)
•According to the survey, the population is all local businesses and the sample is the 50 to whom the questionnaire was send.
Because the committee wants to know the importance of students as customers to local businesses. So, here our population will be all local businesses and sample is 50 to whom the questionnaire was sent.
•Rate of Nonresponse:-
{100-(response received/sample sent *100) }
•Putting the values in the formula:-
{100-(28/50*100) } =44
•Hence, the rate of Nonresponse is 44%
