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 25 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?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Did you know?

Normal urine is sterile. It contains fluids, salts, and waste products. It is free of bacteria, viruses, and fungi.

Did you know?

Looking at the sun may not only cause headache and distort your vision temporarily, but it can also cause permanent eye damage. Any exposure to sunlight adds to the cumulative effects of ultraviolet (UV) radiation on your eyes. UV exposure has been linked to eye disorders such as macular degeneration, solar retinitis, and corneal dystrophies.

20,000 year old Arctic ground squirrel mummy 20,000 year old Arctic ground squirrel mummy
Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r Defibrillator. Defibrillators are devices that supply a voltage charge to the heart in the hope of r
On May 15, 1916, after deliberating for one hour, an all-white jury in Waco, Texas, found seventeen- On May 15, 1916, after deliberating for one hour, an all-white jury in Waco, Texas, found seventeen-
An orange-red biohazard symbol indicates that bloodborne pathogens may be present, and items should ... An orange-red biohazard symbol indicates that bloodborne pathogens may be present, and items should ...
The level of future emissions is closely linked to the rate of population growth The level of future emissions is closely linked to the rate of population growth
Foods for Baby’s First Year Foods for Baby’s First Year
Video: Stress and Immune System Animation

For a complete list of videos, visit our video library