during a 10-year period of constant inflation, the value of a $600,000 property will increase according...

during a 10-year period of constant inflation, the value of a $600,000 property will increase according to the equation v=600,000e^0.07t

^{a. The value of the property in 3 years will be
$____________}

^{b. This property will be worth double its original value in
______ years.}

Expert Solution

a) The value of the property in 3 years = 600,000e^0.07t

= 600,000e^0.07(3)

= $740,206.84

The value of the property in 3 years will be $740,206.84.

b) This property will be worth double its original value means the value will be $1,200,000

600,000e^0.07t = 1,200,000

e^0.07t = 1,200,000 / 600,000 = 2

ln e^0.07t = ln (2)

0.07t = 0.7

t = 0.7/ 0.07 = 10 years

This property will be worth double its original value in 10 years.

Rahul Sunny answered 1 year ago

A 10-year bond has face value (redemption value) $600,000 and quarterly coupons of 4%. Consider the...

A 10-year bond has face value (redemption value) $600,000 and quarterly coupons of 4%. Consider the time right after the 12th coupon has been paid, when the yield is 6.9%. (a) What is the price of the bond? (b) Compute the price of the bond if the yield were to increase by 1 basis point (a basis point is 1/100 of 1%). What is the absolute value of the difference between that price, and your answer to part a)? (c)...

Linkers: There is a freshly issued 10‐year inflation‐linked bond with a face value of 1,000. Inflation...

Linkers: There is a freshly issued 10‐year inflation‐linked bond with a face value of 1,000. Inflation in the coming year is 3%. What is the principal at the beginning and end of this year and the coupon this year and next year, for A) a zero‐coupon inflation indexed bond? B) a bond with 5% annual coupon rate that is interest‐indexed, and C) a bond with a 5% coupon rate that is capital‐indexed?

2. A company issued 10%, 5-year bonds with a par value of $600,000. The market rate...

2. A company issued 10%, 5-year bonds with a par value of $600,000. The market rate when the bonds were issued was 8%. The company received $613,600 cash for the bonds. What is the semi-annual Bond Interest Expense?

For the non-constant growth stock, is the capital gain yield constant during their non-constant growth period?...

For the non-constant growth stock, is the capital gain yield constant during their non-constant growth period? Why? What’s the horizon value (terminal value)? Is the horizon value a present value? If not, how to get the present value??

According to Marx, what is social property? A. Intellectual property during the industrial age B. The...

According to Marx, what is social property? A. Intellectual property during the industrial age B. The means of production C. The property of the small independent farmer or storekeeper D. Can be anything—your house, my birdhouse.

suppose the natural gdp is constant. for every 1 percent increase in the rate of inflation...

suppose the natural gdp is constant. for every 1 percent increase in the rate of inflation above its expected levals, firms are willing to increase real gdp by 4 percent. initially, the output ratio is 100 and the inflation rate equals 4 percent. based on this information. a. calculate the inflation rates when output ratio is 95 and 105 respectively. b. Growth rate of nominal GDP in the economy.

DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has...

DBM: A property that is book-depreciated over a 10-year period by the Declining Balance Method has $27,208.81 book value on the 3rd year. Determine the assumed salvage value of the property (round-off k to 4 decimal places).

On February 28,2018, Marlin Corp. issues 8%, 10-year bonds payable with a face value of $600,000....

On February 28,2018, Marlin Corp. issues 8%, 10-year bonds payable with a face value of $600,000. The bonds pay interest on February 28 and August 31. The company amortizes bond discount using the straight line method. Requirement 1. If the market interest rate is 7% when Marlin corp issues its bonds, will the bonds be priced at par, at a premium, or at a discount? explain. The 8% bonds issued when the market interest rate is 7% will be priced...

High Growth Period: Growth rate during period = 10% Payout rate during period = 40% Stable...

High Growth Period: Growth rate during period = 10% Payout rate during period = 40% Stable Growth Period: Growth rate during period = -1% Payout rate during period = 80% Please assume all other inputs remain unchanged. Please show your work. There are two stocks. Assume a capitalization rate of 10%. Stock A is expected to pay a dividend of $15 next year. Thereafter, dividend growth is expected to be -2% per annum forever (note that dividends are declining). Stock...

Hello, Present value of an annuity due is €600,000 Yearly repayments is = €50,000 Period (n)...

Hello, Present value of an annuity due is €600,000 Yearly repayments is = €50,000 Period (n) = 10 years Calculate the interest rate on this loan, assuming the first payment is made immediately. Please show all your working out.

Question