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Assignment 5

Assignment 5. And some incidentals. Consumer debt has soared 39% in the last five years and is now $1.3 trillion. What was consumer debt five years ago ? What a lot of you did… 1.3trillion – (.39*1.3trillion) = $ 0.793trillion. Three things:. 1. First you can check your answer:.

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Assignment 5

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  1. Assignment 5 And some incidentals

  2. Consumer debt has soared 39% in the last five years and is now $1.3 trillion. What was consumer debt five years ago? What a lot of you did… 1.3trillion – (.39*1.3trillion) = $ 0.793trillion

  3. Three things: 1. First you can check your answer:

  4. You can’t decrease some value in substitute for an increase in reverse: Example: If I have 10 apples and they increase by 50% I then have 15 apples. If I have 15 apples and they decrease by 50% I then have 7.5 apples.

  5. Consumer debt has soared 39% in the last five years and is now $1.3 trillion. What was consumer debt five years ago? 3. What’s happening in the problem?

  6. New Value = $1.3trillion Reference Value = ? % change = 39% = .39

  7. Check it:

  8. Easier way: x*(1+.39) = 1.3 x = .935 trillion dollars

  9. Let’s say that consumer debt has risen 3.9% in each of the last five years. If it was at $1.3 trillion five years ago then what is it now? First way, as an exponential 1.3*(1+.039) = 1.3507*(1+.039) = 1.4033*(1+.039) = 1.458*(1+.039) = 1.5149*(1+.039) =

  10. This is the same as 1.3*(1+.039)5 = 1.57 trillion dollars Second way, as a successive percent: (1+.039)*(1+.039)*(1+.039)*(1+.039)*(1+.039)-1 = .2108 21.08% is the overall percent change over the five years: 1.3*(1+.2108)=1.57 trillion dollars

  11. 3. There were 100 cellular telecommunications employees in the year 2000. The number of cellular telecommunications employees increased 10.4% from 2000 to 2001 and decreased 5.5% from 2001 to 2002.  What was the overall percent change in the number of employees from 2000 to 2002?  How many cellular telecommunications employees were there in 2002?

  12. Many of you did… 100 * (1+.104) = 110.4 in 2001 110.4 * (1-.055) = 104 employees in 2002 Percent Change:

  13. Few of you did… (1 ± P1)*(1 ± P2) – 1 = % Change (1 + .104)*(1 - .055) – 1 = .0433 = 4.33% How many employees?

  14. OR if there is a 4% increase on 100ppl that’s just… 100*(1+.04) = 104ppl

  15. Suppose, hypothetically, that inflation is 3% per year and suppose that the graph of your salary in constant dollars looks like the graph below: Is your salary in current, non-constant dollars A. increasing B. constant C. decreasing D. cannot be determined from information given

  16. Suppose, hypothetically, that inflation is 3% per year and suppose that the graph of your salary in constant dollars looks like the graph below: Is your salary in current, non-constant dollars A. increasing B. constant C. decreasing D. cannot be determined from information given.

  17. STAGE 3 • Presentations

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