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10. The rule of70 applies in any growth rate application. Let's say you have S10,000 in...
The Rule of 70 applies in any growth rate application. Let’s say you have $1000 in...
The Rule of 70 applies in any growth rate application. Let’s say you have $1000 in savings and you have three alternatives for investing these funds. How long would it take to double your savings in each of these 3 accounts? Show your answers. • A savings account earning 1.5 % interest per year • A U.S. Treasury bond mutual fund earning 3.5% interest per year • A stock market mutual fund earning 9% interest per year
Problem set #3 1) What is human capital, and how is it different from strictly the...
Problem set #3 1) What is human capital, and how is it different from strictly the quantity of workers available for work? Name three ways to increase a nation’s human capital. Is an increase in the size of the labor force also an increase in the human capital? Explain your answer. 2) The Rule of 70 applies in any growth rate application. Let’s say you have $1000 in savings and you have three alternatives for investing these funds. How long...
3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule...
3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule states that (72 / the interest rate) = doubling time. For example, if the interest rate is 10% and you invest $10 today, in 7.2 years you will have $20. (72/10 = 7.2, the doubling time) My sister, a financial planner, would suggest that you save today for peace of mind. So today, let's put $1,000 in a mutual fund that rather consistently yields...
According to treasurydirect.gov, 30-Year treasury bonds earning 2.375% interest were issued on 11/15/2019 (CUSIP 912810SK5). These...
According to treasurydirect.gov, 30-Year treasury bonds earning 2.375% interest were issued on 11/15/2019 (CUSIP 912810SK5). These treasury bonds were offered in multiples of $100 (par or face value). Also, according to treasurydirect.gov, treasury bonds pay interest on a semi-annual basis. a. Lets say that you bought one of these treasury bonds. Every time you received an interest payment from this bond, you placed it in a savings account earning a yearly nominal 2.375% interest rate compounded semi-annually. In 30 years,...
The Taylor rule specifies how policymakers should set the federal funds rate target. Suppose that U.S....
The Taylor rule specifies how policymakers should set the federal funds rate target. Suppose that U.S. real GDP rises 3% above potential GDP, all else constant. According to the Taylor rule, the Fed should (raise lower) the federal funds rate target by (1.75%,1.25%,1.5%,2%) . Suppose instead that the U.S. inflation rate rises by 3%, all else constant. According to the Taylor rule, the Fed should (raise,lower) the federal funds rate target by (4.5%,4.75%,5%,4.25%) . 1. The opportunity cost of holding...
Please say which python mode you use and be very thourough with details as I'm have...
Please say which python mode you use and be very thourough with details as I'm have a tough time with this.This should be done through python According to Wikipedia, if you can invest PV for n years at an interest rate of i per year (where interest of "5 percent" is expressed as 0.05), the amount FV you will get back is shown in this formula. FV= PV * (1+i)^t The requirements are to Create an application that will get...
1. You are current saving for your son's college expenses (tuition, room/board). She is 10 years...
1. You are current saving for your son's college expenses (tuition, room/board). She is 10 years old and will begin college in 8 years. Set aside for her education you have a brokerage account with $10,000 fully invested in an equity index fund that is expected to earn 10% per year. Your plan is to send your son to a public school where the expenses are currently (at T = 0) $18,000 per year, however you expect the expenses to...
Life Insurance Needs Analysis Case Your friend John asks you for advice concerning life insurance. John...
Life Insurance Needs Analysis Case Your friend John asks you for advice concerning life insurance. John is 26 years old and graduated from law school last year. He currently earns $43,000 per year. John’s wife, Mary, is a graphics designer who currently earns $51,500 per year. Mary is 28 years old. The couple have three children: Billy, age 2, Cindy, age 4, and Sally, age 6. John and Mary pay $1,075 per month for their home mortgage, which will be...
Practice Problems 1. You invest $8,000 in a savings account, the interest rate is 12% per...
Practice Problems 1. You invest $8,000 in a savings account, the interest rate is 12% per year and the length of time is 15 years. Compounding is monthly. What is the value of the savings account at the end of ten years? 2. What would be the answer if compounding is every six months? 3. How many periods does it take for money to double if the interest rate is 12% per period? 4. If the interest rate is 12%...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B)...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
3. The Rule of 72 is a very useful approximation for understanding exponential growth. The Rule states that (72 / the interest rate) = doubling time. For example, if the interest rate is 10% and you invest $10 today, in 7.2 years you will have $20. (72/10 = 7.2, the doubling time) My sister, a financial planner, would suggest that you save today for peace of mind. So today, let's put $1,000 in a mutual fund that rather consistently yields...
According to treasurydirect.gov, 30-Year treasury bonds earning 2.375% interest were issued on 11/15/2019 (CUSIP 912810SK5). These treasury bonds were offered in multiples of $100 (par or face value). Also, according to treasurydirect.gov, treasury bonds pay interest on a semi-annual basis. a. Lets say that you bought one of these treasury bonds. Every time you received an interest payment from this bond, you placed it in a savings account earning a yearly nominal 2.375% interest rate compounded semi-annually. In 30 years,...
Practice Problems 1. You invest $8,000 in a savings account, the interest rate is 12% per year and the length of time is 15 years. Compounding is monthly. What is the value of the savings account at the end of ten years? 2. What would be the answer if compounding is every six months? 3. How many periods does it take for money to double if the interest rate is 12% per period? 4. If the interest rate is 12%...
11) Which of the following typically has the lowest yield? A) 5-year AAA corporate bond B) 2-year U.S. Treasury note C) Fed Funds D) 3-month U.S. Treasury bill 12) Debt instruments are also called: A) adjustable notes B) credit instruments C) perpetual securities D) interest rate swaps 13) Which of the following characteristic is NOT fixed on a coupon bond? A) Current yield B) Coupon rate C) Maturity D) Par amount 14) If you purchased a U.S. Treasury at a...
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