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Brut [27]
3 years ago
11

Steve and Ed are cousins who both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve o

n his 20th birthday, and he just made a 6th payment into the fund. The grandfather will make 40 more $2,500 payments until a 46th and final payment is made on Steve's 65th birthday. Until now, the grandfather has been disappointed with Ed, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Ed. He will make the first payment to a trust for Ed today, and he has instructed his trustee to make 40 additional equal annual payments until Ed turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of 8%, how much must the grandfather put into Ed's trust today and each subsequent year to enable him to have the same retirement nest egg as Steve after the last payment is made on their 65th birthday?
Business
1 answer:
iVinArrow [24]3 years ago
6 0

Answer:

Answer A is correct

Explanation:

Step 1 find how much Steve will have when he retires:

financial calculator steps

press g 7 (to set the calculator to assume payments are made at the beginning of the period)

8 i (interest earned)

46 n (periods remaining)

-2500 pmt (payment made into the account each period)

0 PV (starting balance of account)

solve for FV

FV = $1,129,750.38

We can now use this value to solve backwards

8 i

41 n (only 41 more payments here)

0 PV (starting balance)

1,129,750.38 FV (ending value)

solve for pmt

pmt = 3,725.55 ~ 3,726 so answer A

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Alfred is saving up money for a down payment on a townhouse. He currently has $5016$ 5016, but knows he can get a loan at a lowe
VikaD [51]

Answer:

It will take Alfred to accumulate the $5994 annually 4.1367 and monthly 4.0557

Explanation:

In order to calculate how long will it take Alfred to accumulate the $5994 we would have to use the following formula:

A=P(1+r/n)∧n*t

P=$5,016

A=$5994

r=4.4%

n=1 annually

n=12 monthly

Therefore, t annually would be as follows:

5,994=$5,016(1+(4.4%/100)/1)∧1*t

t=4.1367

Therefore, t monthly would be as follows:

5,994=$5,016(1+(4.4%/100)/12)∧12*t

t=4.0557

It will take Alfred to accumulate the $5994 annually 4.1367 and monthly 4.0557

7 0
3 years ago
Rutgers Industries has the following inventory information for 2019: Jan 1 Beginning Inventory 240 units at $100 per unit June 1
timofeeve [1]

Answer:

$86,000

Explanation:

FIFO means first in, first out. It means that the first purchased inventory is the first to be sold.

This means thay the 500 units sold would be taken from the earliest purchased inventory and the ending inventory would be the most recently purchased inventories.

Ending inventory = (80 × $150) + (370 × $200) = $12,000 + $74,000 = $86,000

I hope my answer helps you

4 0
3 years ago
The total dollar value of all goods and services produced by all people within the boundaries of a country during a specified ti
kvasek [131]

Answer:

The gross domestic product

Explanation:

The gross domestic product = Consumption spending + Investment + Government Spending + Net Export

8 0
3 years ago
Kelly sells women's accessories. Her prospective buyer is smiling and is eyeing the samples Kelly brought with her to the sales
Paladinen [302]

Answer:

Ask the potential client to try out the accessories and give the prices.

Explanation:

Having the legs uncrossed and her arms relaxed the client is showing that is comfortable with the situation and open to accept the products offered by Kelly. The best way to proceed would be presenting her prices offer and starting the negotiation, she should pay attention to the client's behavior to know of she is willing to negotiate and acquire the products.

3 0
3 years ago
Consumers are particularly price-responsive when:a. it is difficult to substitute across suppliers and prices are high. b. they
s344n2d4d5 [400]

Answer:

The correct answer is the option C: there are many substitute goods available for a product, and they have a long time horizon to adjust their consumption.

Explanation:

To begin with, the concept known as <em>''price-responsive'' </em>in the marketing field and in the business world refers to the ability by the consumers to adjust their consumption behavior regarding the prices that are being charged by the company in order to control the use of the good itself and therefore to avoid paying high prices. Moreover, it is understood that in this theory scheme the consumers are adaptative to the services price changes that the company tends to do.

8 0
3 years ago
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