1. You plan to put $10,000 in a saving plan for two years. How much will you have at the end of the two years
if you receive a 12.5% stated annual interest rate, compounded annually?
(use just two decimal points in your answer )
Eective Annual Rate (EAR) and Annual Percentage Rate (APR):
1 + EAR = 1 +
Present Value of an annuity:
P V = annuity
1 (1 + i)N
Future Value of an annuity:
F V = annuity
(1 + i)N 1
RA/C = RA/B RB/C
RA/B = RB/A
HOMEWORK 1 (answer key)
1. An advantage of the corporate form of ownership is _.
2. Which of the following statements is most correct?
(a) The shareholders of a c
Tamara is currently twenty-eight years old, plans to retire at age seventy
and to live to age ninety. Her labor income is $50,000 per year, and she intends to maintain
a constant level of real consumption spending over the next sixty-two years
1. Money Supply
Consider a summarized central bank balance sheet where some small items are ignored:
Commercial banks borrowing
Required reserves of banks