# Question & Answer: Equivalence Use economic equivalence to determine the amount of money or value of i that makes the following sta…..

Equivalence Use economic equivalence to determine the amount of money or value of i that makes the following statements correct. (a) \$5000 today is equivalent to \$4275 exactly 1 year ago at i = _____ % per year. (b) A car that costs \$28 000 today will cost \$ ____ a year from now at i = 4% per year. (c) At i = 4% per year, a car that costs \$28, 000 now, would have cost \$ _____ one year ago. d) Last year, Jackson borrowed \$20, 000 to buy a pre owned boat. He repaid the principal of the loan plus \$2750 interest after only 1 year. This year, his brother Henri borrowed \$15, 000 to buy a car and expects to pay it off in only 1 year plus interest of \$2295. The rate that each brother paid for his loan is ______ % for Jackson and _____ % per year for Henri. e) Last year, Sheila turned down a job that paid \$75, 000 per year. This year, she accepted one that pays \$81, 000 per year. The salaries are equivalent at i = ___ % per year.