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Running head: ECONOMICS
1
Economics
Student’s Name
Institution Affiliation
ECONOMICS
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What to charge for each statute to earn return rate of 2.8% per month
Return wanted per month (rate of return, i) = 2.8%
Number of months (n) (4 years) = 4*12 = 48
Current costs per ounce (PV) = $0.6134
Price of ounce is falling consistency per month (for next 6 years) = $0.005
Periodic rate (I/Y) = 0.005/0.6314 = 0.8151%
PMT = $0.005
FV =PV (1-i/y)n-1 = 0.6134(1-0.008151)47 = $0.4203
Cost incurred due to usage in the month=. For 43 statues the printer is using 2.25 ounces of the
material and its cost in the nth month is (0.6314-0.005(n-1...