1. [6 points] Suppose you invested into a mutual fund account on January 1st, 2020. You earned 2% return in January and 5% return in February 2020. Then, the account balance at the end of February 2020 is $21,420. How much did you invest in the fund on January 1st, 2020? 2. [4 points] Your portfolio contains 60% of stock A and 40% of stock B. Assume that stock A earned a 5% return and stock B earned – 4% return this month. What is your total portfolio return this month? 3. Consider the following formula to calculate the monthly payment amount. M= ????1- 1(1+??)?? a) [4 points] In this equation, P represents the principle, i the (monthly) interest rate, and n the number of payment terms for a mortgage with a principle balance of 200,000, monthly interest rate of 0.3%, and the number of payment terms of 360. Calculate the monthly payment amount M. b) [6 points] Construct a vector M of length 3 with the results of this calculation for a series of principle balances: 150,000, 180,000, 220,000.
Maji Mazuri Water and Sewerage Company limited is the only water provider in Mjini city. The company supplies water to two distinct markets; domestic and commercial users. The demand for the company’s product in the two markets is represented by the following equations; Q1= 101 – 0.5p1 Q2= 160.4 – 0.2P2 where Q1= output sold to domestic users Q2= output sold to commercial users P1= price charged to domestic users P2= price charged to commercial users The unit cost of the company is given by the function C = 160 + 20Q + 18Q2 The total demand fpr the company’s output is given by the equation; Q = 200-4P. Required (a) The profit maximising level of output of the two markets. (b) Price to be charged in the two markets.
March 2, 2016
7:59 am
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