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Jlenok [28]
3 years ago
8

Simple Interest versus Compound Interest [LO1] First City Bank pays 7 percent simple interest on its savings account balances, w

hereas Second City Bank pays 7 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of nine years?
Business
1 answer:
inna [77]3 years ago
8 0

Answer:

You would have $1,251 more money in second city bank than the first city bank.

Explanation:

First city bank pays 7% simple interest.

Interest = (PRT)/100

Interest = (6000 * 7 * 9)/100 = 378000/100 = $3,780

Amount in first city bank after 9 years = 6000 + 3780 = $9,780

The second city bank pays 7% interest compounded annually, so we would find the amount after 9 years.

P = $6,000

R = 7% = 7/100 = 0.07

T = 9

A = P(1 + R) ^ {t}\\

A = 6000(1 + 0.07)^ {9}\\

A = 6000(1.07)^{9}\\

A = 6000 * 1.838459212420\\

A = 11030.75527452\\

A = 11031

Amount after 9 years in second city bank = $11,031

Difference between first city bank and second city bank: 11031 - 9780 = 1251.

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When ending share price is $98, capital gain yield is 12.64% and dividend yield is 2.47%. Percentage total return is 15.11%. When ending share price is $78, percentage price return is  -7.87%.

<h3>What is the percentage total return?</h3>

The price return on a stock has two components; the price appreciation and the dividend yield.

Percentage price return = price appreciation + dividend yield

Price appreciation = (price in on year - initial price) / initial price

Dividend yield = dividend / initial price

Percentage price return when ending share price is $98:

Capital gain yield = [(98 /87) - 1 ] = 12.64%

Dividend yield = (2.15/87) = 2.47%

Percentage price return when ending share price is $78:

Capital gain yield = [(78/87)  - 1] = -10.34%

Dividend yield = (2.15/87) =2.47%

Percentage price return = -7.87%

To learn more about dividend yield, please check: brainly.com/question/27342287

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3 0
2 years ago
What is discretionary spending within a budget?
eduard

Answer:

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5 0
3 years ago
Data for Corporation and its two divisions, Domestic and Foreign, appear below:
kari74 [83]

Answer:

the segment margin for the Domestic division is $162,200

Explanation:

The calculation of the segment margin is shown below:

Segment Margin is

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= $541,000 - $314,000 - $64,800

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Therefore the segment margin for the Domestic division is $162,200

7 0
2 years ago
Accounts receivable in the amount of $910,000 were assigned to the Fast Finance Company by Sheffield, Inc., as security for a lo
MrRissso [65]

Answer:

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Explanation:

The journal entries are as follows

1. Cash $748,800

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(Being the cash received is recorded)

2. Cash Dr $507,000

        To Account receivables $507,000

(Being the collection is recorded)

3. Note payable $507,000

  Interest expense  $2,600               ($780,000 × 4%  × 1 month ÷ 12 month)

          To Cash $509,600

(Being the note payable and the interest expense is recorded)

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How did the 1973 oil crisis affect the United States?
iragen [17]

Answer:

A)

Explanation:

I hope this helps:)

6 0
3 years ago
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