Answer:
Prof. Finance can withdraw an annual annuity of $ 110,698
Explanation:
Prof. Finance's present value is $1,500,000, which reflects his savings at retirement age 65, so PV= 1,500,000
6% is the interest rate established, so r=6%
Number of withdrawals planned = 25
PMT= $110,698
Answer:
The real exchange rates calculated are 4.5 and 3
Explanation:
We understand that
Real exchange rate = Nominal exchange rate × (Basket cost in US ÷ Basket cost in Norway)
Utilizing this formula, the calculation proceeds as follows:
For a nominal exchange rate of 3, the real exchange rate is calculated as follows:
= 3 × (60 ÷ 40)
= 4.5
For a nominal exchange rate of 2, the real exchange rate is:
= 2 × (60 ÷ 40)
= 3
Answer:
He is less likely to spend on scones.
Explanation:
To understand spending habits, one must consider various factors involved in purchasing.
- Income: Some individuals have a tight budget, which leads them to reduce expenses affecting their spending capabilities. Jose may find purchasing scones less problematic since they are low-cost items, thus indicating a negative correlation.
- Substitution: This could influence Jones’ spending on scones since he typically buys both together; if he stops his coffee purchases, he may also forgo buying scones.