Answer the Following Questions

question 93

Essay

Answer the following questions.
a. Using the Rule of 72, how long does it take for an account balance to double at an 8% interest rate?
b. What is the present discounted value of $500 received annually until the end of time at a 15% interest rate?

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Definitions:

Phillips Curve

An economic concept illustrating an inverse relationship between the level of unemployment and the rate of inflation.

Inflation Rate

The percentage rate of increase in price levels over time, which can erode purchasing power.

Inflation Expectations

The rate at which people expect the prices of goods and services to increase in the future, which can influence economic behavior.

Unemployment Rate

The fraction of people in the labor market who are not employed but are seeking a job.