A bushel of turnips in Philadelphia in 1800 was $0.13. Today, a bushel of turnips cost...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A bushel of turnips in Philadelphia in 1800 was $0.13. Today, a bushel of turnips cost $96.60. a. Assuming growth was constant per year, what was the year-to-year percentage increase in cost over this period? b. If the price of turnips continue to increase at this rate, what will be the cost of a bushel in 2050? For each of the following scenarios, solve for the indicated value (i.e., present value, interest rate, etc). a. Crosby is interesting in investing their $15,601.23 inheritance. What is the minimum semi-annual interest rate they need to earn to triple their money in 10 years? b. At the state fair, Stills comes across an booth that is selling an investment scheme which claims to be able to earn an annual rate of 7%. If he must invest for 5 years, how much does he have to commit today to earn $4,000 in interest? Hint: In general, the difference between FV and PV is interest earned. c. Nash really wants to buy a guitar. Her dad agrees to invest her allowance for her, at a rate of .5% a month. If the guitar costs $123.40 and she has $87 saved up, how long will it take her to be able to buy the instrument? d. You are investing with Young Investment & Co, and you want to double your $14,000 in savings. Assuming YI&C can get you an annual return of 6.5%, how long will it take you to reach your goals? Round to the nearest year. You and your roommate are saving up to go on an end-of-the-year trip to France, in 8 months. You both need $3,400 for air fare, meals, accommodations etc. You found an investment that will net you 2% a month. Your roommate decides to go with a savings account that returns 4.05% every two months. How much do you each need to invest today to reach your goal of $3,400? Who needs to invest more? 4. Chelsea is at a crossroads. Her brother wants her to invest her money with him, saying if she does, he can ensure a .94% return every 6 months. However, her sister claims she can get her interest of $20 in a year if she invests $1000 today. Which sibling should Chelsea go with? a. b. Use the present value approach to answer this question. Use the future value approach to check your answer. A bushel of turnips in Philadelphia in 1800 was $0.13. Today, a bushel of turnips cost $96.60. a. Assuming growth was constant per year, what was the year-to-year percentage increase in cost over this period? b. If the price of turnips continue to increase at this rate, what will be the cost of a bushel in 2050? For each of the following scenarios, solve for the indicated value (i.e., present value, interest rate, etc). a. Crosby is interesting in investing their $15,601.23 inheritance. What is the minimum semi-annual interest rate they need to earn to triple their money in 10 years? b. At the state fair, Stills comes across an booth that is selling an investment scheme which claims to be able to earn an annual rate of 7%. If he must invest for 5 years, how much does he have to commit today to earn $4,000 in interest? Hint: In general, the difference between FV and PV is interest earned. c. Nash really wants to buy a guitar. Her dad agrees to invest her allowance for her, at a rate of .5% a month. If the guitar costs $123.40 and she has $87 saved up, how long will it take her to be able to buy the instrument? d. You are investing with Young Investment & Co, and you want to double your $14,000 in savings. Assuming YI&C can get you an annual return of 6.5%, how long will it take you to reach your goals? Round to the nearest year. You and your roommate are saving up to go on an end-of-the-year trip to France, in 8 months. You both need $3,400 for air fare, meals, accommodations etc. You found an investment that will net you 2% a month. Your roommate decides to go with a savings account that returns 4.05% every two months. How much do you each need to invest today to reach your goal of $3,400? Who needs to invest more? 4. Chelsea is at a crossroads. Her brother wants her to invest her money with him, saying if she does, he can ensure a .94% return every 6 months. However, her sister claims she can get her interest of $20 in a year if she invests $1000 today. Which sibling should Chelsea go with? a. b. Use the present value approach to answer this question. Use the future value approach to check your answer.
Expert Answer:
Answer rating: 100% (QA)
Answer Lets start by calculating the yeartoyear percentage increase in the cost of a bushel of turnips from 1800 to today a YeartoYear Percentage Increase Initial cost of a bushel of turnips in 1800 0... View the full answer
Related Book For
Posted Date:
Students also viewed these finance questions
-
The market value of a certain asset depends upon its useful life as follows: a. The asset requires a capital investment of $120,000, and MARR is 15% per year. Use Monte Carlo simulation and generate...
-
Calculate the oscillating frequency of a FET Hartley oscillator with C = 250pF, L1 = L2 = 1.5 mH, and mutual inductance between L1 and L2 is 0.5 mH.
-
Compute the best fitting line for height as a function of weight. Graph the line. Consider the data in the following table. Weight Yield Height 0.20 0.599 0.17 0.40 0.909 12.83 0.60 1.220 13.47 0.80...
-
in what ways is human resource management a political undertaking? and what is the value of using a political lens to understand human resource management? Use examples to illustrate your answer
-
Explain how the physicianpatient relationship can be improved.
-
You are designing an adder for the blindingly fast 2-bit RePentium Processor. The adder is built from two full adders such that the carry out of the first adder is the carry in to the second adder,...
-
On January 1, 2024, Cameron Incorporated bought 10% of the outstanding common stock of Lake Construction Company for $160 million cash, giving Cameron the ability to exercise significant influence...
-
Raising capital through IPO is one of the frequently used options for long-term finance. Currently the ownership of India Pharmaceuticals Limited is held by promoters and other investors as shown in...
-
Which is correct regarding the HO-3 form? A. Named peril coverage for dwelling and named peril coverage for contents. B. Named peril coverage for dwelling and open peril coverage contents. C. Open...
-
Which of the following statements regarding Medigap insurance is correct? A. It is an alternative to the traditional Medicare plans. B. It is also known as a Medicare Advantage Plan. C. It is...
-
Which of the following is not a human capital risk? A. Employment. B. Medical expenses. C. Morbidity. D. Pension entitlement.
-
Treasury bills are A. A long-term debt obligation. B. Backed by the full faith and credit of the U.S. government. C. A face-value security. D. Interest income subject to local and state income tax.
-
Which are disadvantages of a single life annuity? I. Annuitant has irrevocably given up the principal payment. II. Annuitant may die before the return of the principal payment. III. Annuitant...
-
Discuss whether or not institutional investors that purchased mortgage-backed securities containing subprime mortgages followed reasonable investment guidelines and risk management. Address this...
-
Find the volume of the described solid S. A frustum of a right circular cone with height h, lower base radius R, and top radius r -r- --R
-
Use a HashMap to create a reusable class for choosing one of the 13 predefined colors in class Color. The names of the colors should be used as keys, and the predefined Color objects should be used...
-
Use SecureRandom method ints to generate a stream of 50 random numbers in the range 1 to 999, then filter the resulting stream elements to select only the odd numbers and display the results in...
-
(a) How many of male respondents in this study had some college degree? (b) How would you describe the largest group of respondents? (c) What could be stated about the differences between male and...
Study smarter with the SolutionInn App