EBK MACROECONOMICS
13th Edition
ISBN: 8220106847848
Author: PARKIN
Publisher: Pearson Education (US)
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Question
Chapter 7, Problem 21APA
To determine
Graphically illustrate the supply of loanable funds.
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The interest rate is 6 percent a year and you expect to receive $1,000 next year and the following year. What is present value of $1,000 to be received in two years? The present value of $1,000 to be received in two years is $____ Answer to 2 decimal places
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First Call, Inc., a smartphone company, plans to build an assembly plant-one
that costs $10 million if the real interest rate is 3 percent a year; a larger plant that
costs $12 million if the real interest rate is 2 percent a year;, or a smaller plant that
costs $8 million if the real interest rate is 4 percent a year.
Real interest rate (percent per year)
4.5-
4.0-
Draw a graph of First Call's demand for loanable funds curve.
3.5-
Draw a point to show the quantity of loanable funds demanded when the real
interest rate is
1) 4 percent a year. Label it 1.
3.0-
2) 3 percent a year. Label it 2.
3) 2 percent a year. Label it 3.
2.5-
Draw First Call's demand for loanable funds curve through the points. Label it.
2.0-
1.5-
10
11
12
13
Loanable funds (millions of dollars)
>>> Draw only the objects specified in the question.
1. Compute the following:
a. The present value of $25,000 each year for 4 years at a
7 percent interest rate
present value of $152,000 each year for 5 years at a
6 percent interest rate
b. The
C. The present value of $60,000 each year for 10 years at a
6.5
percent interest rate
Chapter 7 Solutions
EBK MACROECONOMICS
Ch. 7.1 - Prob. 1RQCh. 7.1 - Prob. 2RQCh. 7.1 - Prob. 3RQCh. 7.1 - Prob. 4RQCh. 7.2 - Prob. 1RQCh. 7.2 - Prob. 2RQCh. 7.2 - Prob. 3RQCh. 7.2 - Prob. 4RQCh. 7.2 - Prob. 5RQCh. 7.3 - Prob. 1RQ
Ch. 7.3 - Prob. 2RQCh. 7.3 - Prob. 3RQCh. 7.3 - Prob. 4RQCh. 7.3 - Prob. 5RQCh. 7.3 - Prob. 6RQCh. 7.4 - Prob. 1RQCh. 7.4 - Prob. 2RQCh. 7.4 - Prob. 3RQCh. 7 - Prob. 1SPACh. 7 - Prob. 2SPACh. 7 - Prob. 3SPACh. 7 - Prob. 4SPACh. 7 - Prob. 5SPACh. 7 - Prob. 6SPACh. 7 - Prob. 7SPACh. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - Prob. 12SPACh. 7 - Prob. 13APACh. 7 - Prob. 14APACh. 7 - Prob. 15APACh. 7 - Prob. 16APACh. 7 - Prob. 17APACh. 7 - Prob. 18APACh. 7 - Prob. 19APACh. 7 - Prob. 20APACh. 7 - Prob. 21APACh. 7 - Prob. 22APACh. 7 - Prob. 23APACh. 7 - Prob. 24APACh. 7 - Prob. 25APACh. 7 - Prob. 26APACh. 7 - Prob. 27APACh. 7 - Prob. 28APACh. 7 - Prob. 29APACh. 7 - Prob. 30APA
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Similar questions
- In five years, you want to be able to buy a new car for $30,000. If the interest rate is 3 percent a year, what is the present value of this sum? A. $30,000.00 B. $25,500.00 C. $25,878.26 D. $34,778.22arrow_forwardIf the interest rate is 8 percent, the present value of $200 paid one year from now equals $ If the $200 is received in two years (at the same interest rate), the present value will equal $ (round your answer to two decimal places).arrow_forward
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