Consider the case of the following annuities, and the need to compute either their expected rate of return or duration.
1. Matthew needed money for some unexpected expenses, so he borrowed $2,587.09 from a friend and agreed to repay the loan in three equal installments of $950 at the end of each year. The agreement is offering an implied interest rate of ___.
2. Matthew’s friend, Gregory, has hired a financial planner for advice on retirement. Considering Gregory’s current expenses and expected future lifestyle changes, the financial planner has stated that once Gregory crosses a threshold of $920,925 in savings, he will have enough money for retirement. Gregory has nothing saved for his retirement yet, so he plans to start depositing $40,000 in a retirement fund at a fixed rate of 5.00% at the end of each year. It will take for Gregory to reach his retirement goal.

1. 5.00%

2. 15.70 year

Explanation:

As per the data given in the question,

1)  For computing the interest rate we need to applied the RATE formula which is shown in the attached spreadsheet

Given that

Future value = 0

Present value = -$2587.09

PMT = $950

NPER = 3  years

The formula is shown below:

= RATE(NPER;PMT;-PV;FV)

The present value comes in negative

After applying the above formula, the interest rate is 5%

2)  For computing the number of years we need to use NPER i.e to be shown in the attachment below

Given that

Future Value = $920,925

Present Value  = 0

PMT = -$40,000

Interest rate = 5%

The formula is shown below

= NPER(RATE;-PMT;PV;FV)

The PMT comes in negative

After applying the above formula, the nper is 15.70 years

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know