ECONOMICS W/CONNECT+20 >C<
20th Edition
ISBN: 9781259714993
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 18, Problem 6DQ
To determine
Time value of money (present value and future value).
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QUESTION 19
You lend your sister's daughter $2,000 for a year, if at the end of the year she pays you $2,180. The interest rate you are charging her is
O 1.1%.
O 9%.
O 10%.
O 20%.
You have $40,000 of current income and $60,000 of future income. The interest rate between the current and
future period is 5 percent. What is the maximum amount you could consume in the future?
O $100,000
O $107,000
O $102,000
O $110,000
Please use the graph to answer the questions.
Given the market conditions, what will the prevailing
interest rate be?
O 6%
18%
O 2%
10%
Given the market conditions, how much money is
borrowed in the loanable funds market?
O $10 billion.
$50 billion
O$90 billion
O $70 billion
$30 billion.
Interest rate (%)
18-
16-
14-
12.
10.
8-
6-
+
et
0
Demand
Supply
60 70 80 90
10 20 30 40 50
Quantity of loanable funds (in billions of dollars)
Chapter 18 Solutions
ECONOMICS W/CONNECT+20 >C<
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