What is the nominal annual rate

Assignment Help Business Economics
Reference no: EM13976444

You want to expand your garage. A contractor, who was highly recommended, says that he will do the whole job (new roof, automatic garage door, insulation and more) for $55,000. He offers you two choices:

1) You can pay the $55,000 cash, now.

2) You can make $11,000 down payment now, and pay $1200 each month for four years.

Questions:

A. At what monthly bank interest rate would the two choices be equivalent?

B. What is the nominal annual rate?

Reference no: EM13976444

Questions Cloud

What is the long-run average cost : A firm has a production function Q = F(K,L) with constant returns to scale, where K is units of capital and L is units of labour. Input prices are r = $2 per unit of K and w = $1 per unit of L. When it produces 5 units of output, it uses 2 units of c..
Describe the behavior of oligopolistic firm : Describe the behavior of oligopolistic firm. how does the firm use Game Theory? define and explain the two types of game theory associated with competition? how do decisions change from short run to long run?
Rival firm cuts its price-best strategic response of firm : When a rival firm cuts its price, the best strategic response of the firm, in many cases, is to retaliate with a price cut of its own. What practical advices or tactics would you provide to business executives as to what they can do that won’t land t..
What is the nominal annual rate : You want to expand your garage. A contractor, who was highly recommended, says that he will do the whole job (new roof, automatic garage door, insulation and more) for $55,000. He offers you two choices: At what monthly bank interest rate would the t..
Measuring income inequalities-progressive consumption tax : You will explain the causes of income inequality in the U.S. and demonstrate the problems associated with measuring income inequalities. Analysis of income distribution data does not lead all economists to the same positive or normative conclusions. ..
Pollution tonnage with an efficient outcome emissions fee : Firm A emits 200 tons of pollution and firm B emits 150 tons of pollution. Assume that the government issues 300 tradable permits (with one permit allowing for one ton of pollution). Each firm receives 150 tradable permits. Would the annual pollution..
Using microeconomic theory : When wages increase, will the typical person work more or less? Explain your answer using microeconomic theory. (Note: The substitution and income effects for leisure demand are an important part of this topic).
With regard to global warming policy : With regard to global warming policy, describe, in a short paragraph, the importance of: Discounted costs and benefits. Public goods. We also discussed similarities between solutions, or potential solutions, to overfishing and global warming. describ..

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd