FIN100

FIN100

• In view of the weak economy of the last several years, explain which of the four (4) components of GDP had, or is having, the greatest positive impact in our economy. Use the following historical tables to support your response. • Go to the Bureau of Economic Analysis at www.bea.gov Navigate on the home page to where it states “National,” then select “Gross Domestic Product”. Next, select “GDP and the National Income and Product Account (NIPA) Historical Tables”. The direct Web address is http://bea.gov/national/index.htm#gdp

Week 6
ECO100
“GDP” Please respond to the following:
• In view of the weak economy of the last several years, explain which of the four (4) components of GDP had, or is having, the greatest positive impact in our economy. Use the following historical tables to support your response.
• Go to the Bureau of Economic Analysis at www.bea.gov Navigate on the home page to where it states “National,” then select “Gross Domestic Product”. Next, select “GDP and the National Income and Product Account (NIPA) Historical Tables”. The direct Web address is http://bea.gov/national/index.htm#gdp
REPOND TO LYDIA
The four components of the GDP having the greatest impace in our economy is personal consumption of goods, government spending, exports, and residential investiments. This says to me that people are finally feeling confident enough to spend more on personal items, government is starting new projects, we are exporting more goods to foreign countries and the housing market is finally bouncing back. I think the collapse of the housing market had the largest impact on the economy over the last few years and with its recovery we are finally seeing growth in the GDP.
http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

FIN100
1. What is the “interest rate,” and how is it determined?

2. Complete the following homework scenario:
Bob and Lisa are both married, working adults. They both plan for retirement and consider the $2,000 annual contribution a must.

First, consider Lisa’s savings. She began working at age 20 and began making an annual contribution of $2,000 at the first of the year beginning with her first year. She makes 13 contributions. She worked until she was 32 and then left full time work to have children and be a stay at home mom. She left her IRA invested and plans to begin drawing from her IRA when she is 65.

Bob started his IRA at age 32. The first 12 years of his working career, he used his discretionary income to buy a home, upgrade the family cars, take vacations, and pursue his golfing hobby. At age 32, he made his first $2,000 contribution to an IRA, and contributed $2,000 every year up until age 65, a total of 33 years / contributions. He plans to retire at age 65 and make withdrawals from his IRA.

Both IRA accounts grow at a 7% annual rate. Do not consider any tax effects.
Write a two to three (2-3) paragraph summary in which you:
Create a chart summarizing the details of the investment for both Bob and Lisa.
Explain the results in terms of time value of money.

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