Essay Available:

You are here: Home → Math Problem → Mathematics & Economics

Pages:

4 pages/≈1100 words

Sources:

2 Sources

Level:

APA

Subject:

Mathematics & Economics

Type:

Math Problem

Language:

English (U.S.)

Document:

MS Word

Date:

Total cost:

$ 17.28

Topic:

# Risk and Uncertainty in Economics (Math Problem Sample)

Instructions:

economics calculation

source..Content:

Risk and uncertainty in economics

Name

Affiliated Institute

Date

Risk and uncertainty in economics

The value of the second alternative is analyzed below:

The formula for finding the present value based on the future is provided by

The Future Amountâ€™s PV=A(1+r)n

A represents the amount of annuity while r is the opportunity rate of interest and in the period of years when the amount was received. Basing on this fomularae, the present value of the second alternative can be found by adding the future amount of the two years.

Therefore, present value=

700000(1+0.08)1 + 700000(1+0.08)2 = $(6, 481,481.48+6,001,371.74)

$ 12, 482, 853.22

Since the amount provided in one lump sum was only12 million, the second alternative appears to be the best option since it avails students with 12.482 million dollars which is 0.482 more that the lump sum provided in the initial scholarship.

B

Since the new opportunity rate of interest is 12 percent, the calculation will be modified so as to show the variance of the newly provided parameter.

Therefore, the second alternative can be calculated by

700000(1+0.12)1 + 700000(1+0.12)2 = $(6, 250, 000 + 5,580,357.14)

=11.83 million dollars.

Since the amount provided in one lu...

Get the Whole Paper!

Not exactly what you need?

Do you need a custom essay? Order right now:

### Other Topics:

- Risk and Uncertainty in EconomicsDescription: A represents the amount of annuity while r is the opportunity rate of interest and in the period of years when the amount was received...4 pages/≈1100 words| 2 Sources | APA | Mathematics & Economics | Math Problem |
- Economics Math Problem Assignment: Maximizing RevenueDescription: a price increase of two dollars will lead to a single less sale. As such, John Deere should ensure that the price of the tractors does not exceed 1900. ...1 page/≈275 words| No Sources | APA | Mathematics & Economics | Math Problem |
- Regression and ANOVA Analysis: Prepare Meals, Driving TimeDescription: The total number of observations is 12 for all the variables. Below is the explanations of the regression analysis and ANOVA test of the observed data....2 pages/≈550 words| 1 Source | APA | Mathematics & Economics | Math Problem |