ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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1. A consumer, who is initially a lender, remains a lender even after a decline in interest rates. Is this consumer better off or worse off after the change in interest rates? If the consumer becomes a borrower after the change is he better off or worse off?
2. What is the present value of $100 one year from now if the interest rate is 10%? What is the present value if the interest rate is 5%?
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- Find the Income when the consumption is $13240 million and the savings are $ 9991 millionarrow_forwardIf an economic expansion in the economy caused an increase in the demand for loanable funds, what would be the effect on the interest rate and the quantity of funds loaned in the credit market? Question 20 options: Interest rates would decrease and the quantity of funds loaned would increase Interest rates and the quantity of funds loaned would decrease Interest rates and the quantity of funds loaned would increase Interest rates would increase and the quantity of funds loaned would decreasearrow_forwardWhy interest rates differ at any given time a range of interest rates prevails in the economy. what four factors contribute to differences in interest rates across consumers?arrow_forward
- Dell Computer makes its suppliers wait 37 days on average to be paid for their goods; however, Dell is paid by its customers immediately. Thus, Dell earns interest on this float, the money that it is implicitly borrowing. If Dell can earn an annual interest rate of 4%, what is this float worth to Dell per dollar spent on inputs?arrow_forward1. math of interest. please solve correctlyarrow_forwardWhat group of people benefits from a higher interest rate? Explain how they benefit.arrow_forward
- What is the relationship between interest rates and business investment?arrow_forwardSuppose that the typical consumer has a salary of $30,000 in 2017. His salary grows by 2% per year. What can we say about his ability to pay for his consumption basket over time?arrow_forward6. You may borrow or lend at a 5% interest rate, which you expect to remain stable forever. Make a choice and explain your answer in each scenario below. a. You may receive a gift of $500 today or a gift of $540 next year. b. You may receive gift of $100 today or a four-year loan of $500 without interest. c. You may receive a $350 rebate on an $8000 car or one year of no-interest financing on the full price of the car. d. You have just won $1 million in the lottery. You may receive $500,000 now or the full million, paid out in 20 annual payments of $50,000. e. Alternatively, you may take $500,000 now or receive $25,000 per year for eternity (a contract that your heirs will inherit).arrow_forward
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