Equivalent equal annual payment be in constant dollars

Assignment Help Business Economics

Reference no: EM13801700

Assume that you borrow $15,000 for five years (annual payments) at a market rate of 5%. Assuming that inflation is 3.5%, what would the equivalent equal annual payment be in constant dollars?___________________________

What is the Actual dollar amount of a $15,000 constant dollar cash flow 10 years from now? Assume that the inflation free rate i’ is 7% and the market rate i=12%.

Reference no: EM13801700

Questions Cloud

Numerous interest groups influencing government action : There are numerous interest groups influencing government action in the United States today. Given your personal situation, interests, activities, and aspirations, list five special interest groups, which you might consider actively supporting, at le..

Essay summarizing your groups beliefs and actions : As we discussed, there are many different interest groups that exist in the United States today. For this activity, you will choose one such group and do some research to figure out what it does and how it does it. Research the web and other resource..

Explain the conditions for pareto efficiency : With the help of appropriate figure, explain the conditions for Pareto efficiency. Show how the Utility Possibility frontier (UPF) can be derived from the Pareto efficient allocations.

What is the market interest rate : Assume that the 12% rate used in problem 2 is a constant dollar rate (i’). Now discount your end of year cash flows from problem 10 by inflation (f=4%) and re-compute your IRR’ and NPW’. What is the market interest rate (i)______________ IRR’________..

Equivalent equal annual payment be in constant dollars : Assume that you borrow $15,000 for five years (annual payments) at a market rate of 5%. Assuming that inflation is 3.5%, what would the equivalent equal annual payment be in constant dollars?

Passage of the affordable care act : With the passage of the Affordable Care Act the U.S. government requires that everyone have some form of health insurance. One of the provisions of the law is that firms with more than 50 full-time workers must provide health insurance to those worke..

What is the equilibrium price in the market : What is the equilibrium price in the market? What is the amount sold and bought?

Same purchasing capability : You think that you need $60,000/year to live on when you retire. Assuming an annual inflation of 3.4%, how much would you need in actual dollars per year 40 years from now to have the same purchasing capability?

Daily demand for tokens on major urban rapid transit system : The chart on the following page shows the average daily demand for tokens on a major urban rapid transit system. What is the elasticity of demand at a fare of $2.50/token? Is the revenue maximizing fare higher than, lower than or equal to $2.50/token..

User Account

All Pages