This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What is the formula for the present value of 1 one year from now? If the rate of interest is 5 ... (Read 28 times)

krzymel

  • Hero Member
  • *****
  • Posts: 548
on: Jun 29, 2018
What is the formula for the present value of 1 one year from now? If the rate of interest is 5 percent, what is the present value of 10 to be paid one year from now?
 
  What will be an ideal response?

Question 2

The sale of Treasury securities by the Federal Reserve will, in general,
 
  A) decrease the quantity of reserves held by banks.
  B) not change the money supply.
  C) not change the quantity of reserves held by banks.
  D) increase the quantity of reserves held by banks.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

asdfasdf

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jun 29, 2018
Answer to Question 1

The formula for the present value of 1 one year from now is 1/(1 + r) where r is the market rate of interest. If the interest rate is 5 percent, the present value of 10 to be paid one year from now is 9.52 .

Answer to Question 2

A


krzymel

  • Hero Member
  • *****
  • Posts: 548
Reply #2 on: Jun 29, 2018
Correct answers!


asdfasdf

  • Sr. Member
  • ****
  • Posts: 339
Reply #3 on: Jun 29, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

Approximately 25% of all reported medication errors result from some kind of name confusion.

Did you know?

According to research, pregnant women tend to eat more if carrying a baby boy. Male fetuses may secrete a chemical that stimulates their mothers to step up her energy intake.

Factors that Influence Pulse Rate Factors that Influence Pulse Rate
How to calculate simple interest (Part 3) How to calculate simple interest (Part 3)
Quadratic Formula Quadratic Formula
For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ... For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ...
How many hydrogen ions (H+) are present and on what side of the chemical equation? How many hydrogen ions (H+) are present and on what side of the chemical equation?
The Serial Numbers for Each Day of the Year The Serial Numbers for Each Day of the Year
Video: Cardiac Cycle (Part 3 of 4)

For a complete list of videos, visit our video library