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3 years ago

Consider the case of the following annuities, and the need to compute either their expected rate of return or duration.

Business

1 answer:

anastassius [24]3 years ago

6 0

Answer:

1. 5.00%

2. 15.70 year

Explanation:

As per the data given in the question,

1) For computing the interest rate we need to applied the RATE formula which is shown in the attached spreadsheet

Given that

Future value = 0

Present value = -$2587.09

PMT = $950

NPER = 3 years

The formula is shown below:

= RATE(NPER;PMT;-PV;FV)

The present value comes in negative

After applying the above formula, the interest rate is 5%

2) For computing the number of years we need to use NPER i.e to be shown in the attachment below

Given that

Future Value = $920,925

Present Value = 0

PMT = -$40,000

Interest rate = 5%

The formula is shown below

= NPER(RATE;-PMT;PV;FV)

The PMT comes in negative

After applying the above formula, the nper is 15.70 years

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For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as foll

ch4aika [34]

Answer:

$5,225

Explanation:

Calculation for What should Tringali report as its deferred income tax liability as of the end of its first year of operations

Using this formula

Deferred income tax liability=Temporary difference-depreciation*Tringali's tax rate

Let plug in the formula

Deferred income tax liability= $20,900 * 25%.

Deferred income tax liability=$5,225

Therefore What Tringali should report as its deferred income tax liability as of the end of its first year of operations is $5,225

3 0

2 years ago

2. You retire at age 60 and expect to live another 23 years. On the day you retire, you have $568,900 in your retirement savings

hichkok12 [17]

Answer:

The monthly withdrawals are $3,537.85 and will last for 23 years.

Explanation:

We have to calculate the monthly installment of an annuity:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 568,900.00

time 276 (23 years x 12 months)

rate 0.004333333 (5.2% = 5.2 / 100 = 0.052 per year we now divide by the 12 months of a year and get the rate for monthly withdrawals.

$568900 \div \frac{1-(1+0.00433)^{-276} }{0.00433} = C\\$

C $ 3,537.85

5 0

3 years ago

Sue and Neal are twins. Sue invests $5,000 at 7 percent when she is 25 years old. Neal invests $5,000 at 7 percent when he is 30

dolphi86 [110]

Answer:

Sue will have more money than Neal as long as they retire at the same time

Explanation:

Both Neal and Sue invest the same amount ($5,000) at same interest rate (7%). In the compound interest rate formula only the time is differ. When they retire at age 60, Sue has 5 years more than Neal meaning Sue earn more interest than Neal.

3 0

2 years ago

A company had beginning inventory of 12 units at a cost of $15 each on March 1. On March 2, it purchased 12 units at $24 each. O

Tema [17]

Answer:

The cost of the 28 units sold is $548

Explanation:

In the given question,

On March 1 it purchase 12 units for $15 = 12 units × $15 = $180

On March 2 it purchase 12 units for $24 = 12 units × $24 = $288

On March 6 it purchase 7 units for $20 = 7 units × $20 = $140

And, on march it sold 28 units for $63 each

The 28 units could be taken from

12 × $15 = $180

12 × $24 = $288

And remaining 4 units × $20 = $80

So, the total cost of units sold = $180 +$288 +$80 = $548

4 0

3 years ago

Suppose payments will be made for 7 1/4 years at the end of each month from an ordinary annuity earning interest at the rate of

GaryK [48]

Answer:

The size of the payment = $628.63

Explanation:

<em>An annuity is a series of equal payment or receipt occurring for certain number of period. </em>

The payment in question is an example of an annuity . We can work back the size of the payment using the present value of the ordinary annuity formula stated below

The Present Value of annuity = A × (1- (1+r)^(-n))/r

A- periodic cash flow,= ? r- monthly rate of interest - 4.25%/12= 0.354%

n- number of period- (71/4×12)= 87.

Let y represent the size of the payment, so we have

47,000 = y × ( 1-1.00354^(-87))/0.00354

47,000 = y× 74.76

y =47,000/74.7656= 628.63

The size of the payment = $628.63

3 0

3 years ago