EBK MICROECONOMICS
EBK MICROECONOMICS
13th Edition
ISBN: 8220106798652
Author: Arnold
Publisher: CENGAGE L
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Chapter 16.1, Problem 3ST
To determine

The present value.

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Angela puts $5,000 in a savings account that pays 5 percent per year. The future value of her money one year from now is $ As the interest rate (Enter your response as a whole number.) the future value of Angela's $5,000 savings will increase.
The Kelowna Go-Kart Klub has decided to build a clubhouse and track five years from now. It must accumulate $50 000 by the end of five years by setting aside a uniform amount from its dues at the end of each year. If the interest rate is 10 percent, how much must be set aside each year?
Gail has won a lottery that pays her $100,000 at the end of this year and increases by 15 percent per year thereafter for 30 years. Leon has offered Gail ​$10,500,000 today in exchange for all the money she will receive. If Gail can get 6 percent interest on her​ savings, is this a good​ deal? What is the present value of the lottery winnings?
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