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marshall27 [118]
2 years ago
12

Ms. Newcastle has $60,000 income this year and $40,000 next year. The market interest rate is 10 percent per year. Suppose Ms. N

ewcastle wishes to consume $62,000 next year. What will be her consumption this year?
Business
1 answer:
ElenaW [278]2 years ago
6 0

Answer:

Consumption this year=$40,000

Explanation:

Given Data:

Income this year= $60,000

Income Next year= $40,000

Market Interest Rate= 10% per year

Consumption next year=$62,000

Required:

Consumption this year=?

Solution:

Difference in amount for next year= Consumption next year-Income Next year

Difference in amount for next year=$62,000- $40,000

Difference in amount for next year=$22,000

This is the more amount which is required to spend $62,000 next year.

Consumption this year=Income\ this\ year-\frac{Difference\ in\ amount\ for\ next\ year}{1+Market\ interest\ rate}

Consumption\ this\ year=\$60,000-\frac{\$22,000}{1+0.1}\\Consumption\ this\ year=\$40,000

Consumption this year=$40,000

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United Airlines prices its tickets so that it is less expensive to travel between midnight and 5:00 a.m. than during the day, wh
cluponka [151]

Answer:

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Explanation:

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This approach is also known with telecommunication firms such as Vodafone and MTN.

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1 year ago
Let a be the event that a student is enrolled in an accounting course, and let s be the event that a student is enrolled in a st
JulijaS [17]

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2 years ago
Mr. and Mrs. Atoll are planning a party for 10 people and want to make sure they have enough soda for everyone to have two bottl
Rama09 [41]

Answer:

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A new machine with a purchase price of $109,000, with transportation costs of $12,000, installation costs of $5,000, and special
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