Business, 21.02.2020 16:37, cookiee1387
Suppose labor income starts at $50,000 and then grows at a constant rate of 2 per cent per year after that. Let wt be labor income in year t, so that wt = w0(1 + g) t , where w0 = 50, 000 and g = 0.02. (a) If the interest rate is R, what is the formula for the present discounted value (PDV from now on) today (in year 0) of labor income in a particular future year t? (b) Now add up these terms from t = 0 to t = 45 to get a formula for the PDV of labor income. Your answer should look something like that in equation (7.12) of the textbook. (c) Write your answer to part (b) so that it takes the form of the geometric series P DV = w0(1 + a + a 2 + a 3 + ... + a 45). What is the value of a that you find? (d) Apply the geometric series formula to compute the PDV for the case of R = 0.04, R = 0.03, and R = 0.02. What happens when R = 0.02 and why?
Answers: 2
Business, 22.06.2019 02:30, Roof55
When interest is compounded continuously, the amount of money increases at a rate proportional to the amount s present at time t, that is, ds/dt = rs, where r is the annual rate of interest. (a) find the amount of money accrued at the end of 3 years when $4000 is deposited in a savings account drawing 5 3 4 % annual interest compounded continuously. (round your answer to the nearest cent.) $ (b) in how many years will the initial sum deposited have doubled? (round your answer to the nearest year.) years (c) use a calculator to compare the amount obtained in part (a) with the amount s = 4000 1 + 1 4 (0.0575) 3(4) that is accrued when interest is compounded quarterly. (round your answer to the nearest cent.) s = $
Answers: 1
Business, 22.06.2019 02:50, smariedegray
Acompany set up a petty cash fund with $800. the disbursements are as follows: office supplies $300 shipping $50 postage $30 delivery expense $350 to create the fund, which account should be credited? a. postage b. cash at bank c. supplies d. petty cash
Answers: 2
Suppose labor income starts at $50,000 and then grows at a constant rate of 2 per cent per year afte...
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