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Colt1911 [192]
3 years ago
6

Sarah Gray wants to invest a certain sum of money at the end of each year for five years. The investment will earn 4% compounded

annually. At the end of five years, she will need a total of $45000 accumulated. How should she compute her required annual investment? g
Business
1 answer:
guajiro [1.7K]3 years ago
5 0

Answer:

How should she compute her required annual investment?

$ 36.987  

Explanation:

With the present value formula we can calculate how she has to invest today to get $45,000 at the end of the 5 years, with a compounded rate of 4%.

Principal Present Value  =  F /  (1 + r)^t  

In this case we have the future value and we need to find the present value that we have to invest to get the money expected.

Principal Present Value  =  45,000 /  (1 + 4%)^5 = $36,987  

If we invest today $36,987, with a compounded interest rate of 4% we get at the end of the period, 5 years, the total sum of $45,000.

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Suppose the quantity demanded of a particular good increases by 30%, and (the absolute value of) the price elasticity of demand
viktelen [127]

Answer: Option (c) is correct.

Explanation:

Given that,

Quantity demanded increases by = 30%

Price elasticity of demand = 2

Therefore,

Price elasticity of demand = \frac{Percentage\ change\ in\ quantity\ demanded}{Percentage\ change\ in\ prices}

2 = \frac{30}{Percentage\ change\ in\ prices}

Percentage change in prices = \frac{30}{2}

                                                = 15%

Therefore, price of a particular good decreases by 15%.

8 0
3 years ago
The board of directors declared cash dividends totaling $160,000 during the current year. The comparative balance sheet indicate
Nikitich [7]

Answer: $164,300

Explanation:

Cash payments to stockholders shows the total amount that the shareholders of a company got during the year. It includes the money owed to them at the start of the year in addition to cash paid during the year.

= Beginning dividends payable + Dividends for the year - Ending dividends

= 43,200 + 160,000 - 38,900

= $164,300

8 0
3 years ago
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Fynjy0 [20]
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8 0
2 years ago
Crane Real Estate Company management is planning to fund a development project by issuing 10-year zero coupon bonds with a face
xxTIMURxx [149]

Answer:

Present value of zero coupon bond = $283

Explanation:

Provided that zero coupon bonds are to be issued.

In zero coupon bonds issue price is less than face value to meet the needs.

Interest rate = 13%

Duration = 10 years, Paid semiannually.

Thus periods = 20

Interest rate = 13 \times \frac{6}{12} = 6.5

Therefore, Present value factor @6.5% for 20 periods = 0.283

Therefore, Value of bond today = $1,000 \times 0.283 = $283

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Explanation:

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