Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Chapter 15, Problem 1P
To determine
The doubling time at interest rates
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A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant
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Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If
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An investment promises to pay into an account that pays you 6 percent annually, $150 per month for the next twenty-two years. Suppose the first deposit into the account is made one month from today what is the value of the amount which will be in the account at the end of thirty years? Rounded to 2 decimal places.
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Chapter 15 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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- Suppose a(t) = 0.0015 (t-3)4 +0.042 (1-2)³ + 1.2145. Calculate values of a(t) and the effective rate of interest, i, for integer values of t from 0 to 50 (no need for an effective rate at t = 0). Then graph the values of the effective rates of interest Round the a(t) values to 3 decimal points and round the interest rates to 2 decimal in percentage form. pointsarrow_forwardCalculate the present value of each cashflow using a discount rate of 7%. Which do you most prefer most? Show and explain all supporting calculations! Cashflow A: receive $60 today and then receive $60 in four years. Cashflow B: receive $12 every year, forever, starting today. Cashflow C: pay $50 every year for five years, with the first payment being next year, and then subsequently receive $30 every year for 20 years. Cashflow D: receive $9 every other year, forever, with the first payment being next year.arrow_forwardPractice with the rule of 70: If you inherit $20,000 this year and you invest your money so that it grows 3.5% per year, how many years will it take for your investment to be worth $80,000? $160,000? $320,000?arrow_forward
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