Explain consumer needs to save an amount this year

Assignment Help Business Economics

Reference no: EM1345731

A customer is making saving plans for this year and next. She knows that her real income after taxes will be $50,000 in both years. Any part of her income saved this year will earn a real interest rate of 10% between this year and next year. Currently, the consumer has no wealth (no money in the bank or other financial assets, and no debts). There is no uncertainty about the future. The consumer needs to save an amount this year that will allow her to

(1) make college tuition payments next year equal to $12,600 in real terms;

(2) enjoy exactly the same amount of consumption this year and next year, not counting tuition payments as part of next year's consumption; and

(3) have neither asserts nor debts at the end of next year

Reference no: EM1345731

Questions Cloud

Explain how does the price elasticity of demand for corn oil : Explain how does the price elasticity of demand for corn oil influence the quantity-demanded of corn oil and the Total Revenue earned by sellers of corn oil.

Cryptography for standardized regulated and mandated : Whose interests are most significant when finding extent to which cryptography must be standardized, regulated, and mandated?

Project management and team building : What are the three best team building techniques and how they would be used and why these three would be considered the best.

Effective system used in project management : What is an effective system specifically used in project management that can be measured. Perhaps one that would be used in the health care field and why it would be best.

Explain consumer needs to save an amount this year : There is no uncertainty about the future. The consumer needs to save an amount this year that will allow her.

Determination of rate of return : Past year Mike bought 100 shares of Dallas Company common stock for dollar 53 per share. During the year he earned dividends of $1.45 per share.

Explain how project risk assessment techniques : Project management - Please provide examples of how project risk assessment techniques can be applied to a project in the health care field.

Financing foreign operations : United Airlines recently inaugurated service to Japan and now wants to finance the purchase of Boeing 747s to service that route.

What distance db would the bird cover : A force of 315 N is applied horizontally to a wooden crate in order to displac eit 35.0 m accorss a level surface at a constant velocity. As a result of this work the crate's internal energy is increased by an amount equal to 14 percent of the cra..

User Account

All Pages