How much should a new graduate pay in 10 equal annual payments, starting 2 years from now, in order to repay a $30,000 loan he has received today? the interest rate is 6% per year. (note: the first payment is made at the end of year 2, so the cash flows are: at initial time = 0; at the end of the first year = 0; at the end of the second year = c, , at the end of the year 10 = c. here "c" denotes the yearly payments. you need to find "c").

each payment will for 4,320.60 dollars

Explanation:

First, we will calculate the future value of the 30,000 two years from now

then we calcaualtethe annuity present value of this to know the student payment

timeline:

<---//----/-/-/-/-/-/-/-/-/-/-/->

loan    student payments

the loan futre value will be:

30,000 x 1.06^{2} = 33708

Now we calculate an annuity-due which 10 payment being made at 6% discount rate

This will be an annuity-due because today we are receiving the loan and in excatly 2 years form now we will start the payment so it will be at the beginning of the period

Annuity-due formula

PV  $33,708.00

time10 years

rate          0.06 discount rate

PTM = $ 4,320.601

hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi

answer; the landlord can sue the renter,and the renter loses the security deposit;