Calculate Answers to the Following Questions Using Future Value And/or

question 54

Essay

Calculate answers to the following questions using future value and/or present value tables.
a. Tally purchased machinery by executing a $30,000 non-interest-bearing note due in four years. For how much should the machinery be recorded, assuming that the going rate for similar notes is 6 percent?
b. Mindy Kwon is making bank deposits of $3,000 at the end of each year for five years, for purposes of buying a car. Assuming an interest rate of 7 percent, how expensive car will she be able to purchase?
c. To how much will $2,000 grow, assuming it is invested for 2-1/2 years, with interest of 8 percent, compounded quarterly?
d. Liz Astor would like to make a lump-sum deposit today so that she can withdraw $10,000 at the end of each year for the next three years. Assuming a 9 percent interest rate, what should she invest today?

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Definitions:

Monopolist

A market player that is the sole provider of a particular good or service, possessing significant market power to influence prices and output levels.

Diamonds

A precious gemstone made of carbon, often used in jewelry for its brilliance and durability.

Sole Supplier

A market situation in which only one company provides a particular product or service, potentially leading to monopoly power and less competitive prices.

Monopoly

A reiteration for a market structure with a single seller dominating the whole supply of a particular product or service, without close substitutes.