same (constant) amount each year in nominal dollars. How much will you have to save each year so that there is enough money to send your child to college? Tuition increase=3.9% Tuition price in July 2013= $ 36‚993 Tuition in 2032= $36‚993 * (1.039)^19 =$76527.05 Tuition in 2033=$36‚993 * (1.039)^20 = $79511.6 Tuition in 2034=$36‚993 * (1.039)^21=$82612.55 Tuition in 2035=$36‚993 * (1.039)^22=$85834.44 Various tuitions Discounted in 2031 : Nominal savings interest is 7.5 % (our best alternative)
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Advanced Time Value of Money Problems Professor A. Spieler Question 1 (mortgage problem) (Try to work this question WITHOUT using Excel) You purchase a house that costs $625‚000 with an 8%‚ 30-year mortgage. You make a 20% down payment to avoid PMI insurance. 1. What is your monthly payment? 2. Amortize the first and second payments. 3. What is the mortgage balance after 5 years? 4. What percentage of the principal is paid off after 5 years? 5. Suppose after 5 years you refinance at 6%
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the negotiation‚ Erika did not have a very strong BATNA‚ which was getting another company to manufacture the Luna pen after a potential lawsuit that would likely only force Global Service to cease production. DGG’s interest was simply to receive money for the use of the trademark because they had no intentions of resuming the Luna pen part of their business but still wanted the payment for its use or a potential partnership that would benefit both parties. However‚ Global Service’s interest was
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versus nominal GDP; price indices; national income accounting for open economy‚ balance of payments accounts‚ current and capital accounts : B.A. (Hons) Economics 04 (Introductory Macroeconomics) 14.12.2012 (Friday)‚ 11:30 am Department of Economics‚ Delhi School of Economics‚ University of Delhi Mausumi Das Readings: (i) A. Abel‚ B. Bernanke and D.Croushore (2011; 7thedn)‚ Chs‚ 1 & 2. (ii) P. Krugman and M. Obstfeld(2009; 8thedn.)‚Ch 12‚ pages 293-316 only. Unit 2. Money Functions of money; quantity
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FIN 534 – Homework Chapter 4 Directions: Answer the following five questions on a separate document. Explain how you reached the answer or show your work if a mathematical calculation is needed‚ or both. Submit your assignment using the assignment link in the course shell. Each question is worth five points apiece for a total of 25 points for this homework assignment. 1. A $50‚000 loan is to be amortized over 7 years‚ with annual end-of-year payments. Which of these statements is CORRECT? a.
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VALUE Vs PRICE There are four major attributes of a commodity i.e.‚ an item or service produced for‚ and sold on the market has four major attributes. They are: • a value • a use‐value (or utility) • an exchange value • a price (it could be an actual selling price or an imputed ideal price) VALUE In simple words‚ value refers to the importance of a thing or utility of a commodity. But in economics the term “value” has a quite different meaning. According to the famous economist
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accounts which they are recorded in. Some of these differ to those of a business. Membership fees and entrance fees are recorded in the Membership Fees and Entrance Fees accounts in the general ledger respectively. These accounts are found in the Nominal Accounts section and are considered income accounts. Unlike a business‚ the buying and selling of goods is recorded in accounts specifically for those goods (There is no Cost of Sales or Trading Stock account). For instance‚ items sold for cash at
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Vento says that the guiding doctrine of national park policy should be accessibility to the public for a nominal fee or for free. He argues that the American people own the national parks and already contribute toward their upkeep through federal taxes‚ and moreover that the increase in entrance fees will only contribute a small part of the monies necessary
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Money‚ Value of money‚ Inflation and Policy Responses Inflation: Inflation is a sustained increase in the cost of living or the average / general price level leading to a fall in the purchasing power of money. Causes of Inflation:–There are a few different reasons that can account for the inflation in our goods and services; let’s review a few of them. * Demand-pull inflation refers to the idea that the economy actual demands more goods and services than available. This
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Effects of Raising Interest Rates If a central bank increases the base rate‚ this tends to increase all major interest rates in the economy. This means interest rates for both savers and borrowers will increase. Higher interest rates will have various economic effects: 1. Increases the cost of borrowing. Interest payments on credit cards and loans will be more expensive. Therefore this discourages people from borrowing and saving. People who already have loans will have less disposable income
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