1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Leona [35]
3 years ago
13

Determine the amount of money that must be invested now​ (time 0) at 10​% nominal​ interest, compounded​ monthly, to provide an

annuity of ​$7 comma 000 per year for 12 ​years, starting eight years from now. The interest rate remains constant over this entire period of time.
Business
1 answer:
Veseljchak [2.6K]3 years ago
4 0

Answer:

the amount of money that must be invested now is $21068.87

Explanation:

Given that:

Nominal interest = 10%

Annuity = 7000

n = 8 years

The Effective interest rate is calculated by using the formula:

Effective interest rate = ( 1 + \dfrac{r}{100 \times n})^n-1

Effective interest rate = ( 1 + \dfrac{10}{100 \times 8})^8-1

Effective interest rate = 0.1045

Effective interest rate = 10.45 %

Thus ; the the amount of money that must be invested now​  is the present value with the annuity of ​$7, 000 per year for 12 ​years, starting eight years from now.

PV = 7000(\dfrac{(1+ 0.1045)^{12}-1}{0.1045(1 + 0.1045)^{12}})( \dfrac{1}{(1+ 0.1045)^8})

PV = 7000 × 6.666056912 × 0.4515171371

PV = $21068.87

Thus; the amount of money that must be invested now is $21068.87

You might be interested in
Centrifuge is a device used to separate solid components .true or false​
kap26 [50]

Answer: True

Explanation: Hope This Helps :)

7 0
3 years ago
The blue giant has a profit margin of 6.2 percent and a dividend payout ratio of 40 percent. The capital intensity is 1.08 and t
Lana71 [14]

First we calculate the return on equity(ROE) based on the Du-pont equation

ROE =  Net profit margin * Total asset turnover * equity multiplier

Total asset turnover = 1/capital intensity =1/1.08

Equity multiplier = 1+ debt to equity = 1+ 0.54 = 1.54

net profit margin = 6.2% = 0.062

ROE = 0.062*1/1.08*1.54 = 0.0884 = 8.84%

Sustainable growth rate = ROE*(1- dividend payout)

Sustainable growth rate = 0.0884*(1-0.4)

Sustainable growth rate= 0.053 = 5.3%

Sustainable growth rate = 5.30%

6 0
3 years ago
Bill Builder entered into a contract with Carl's Carpets to supply him with the carpeting he needed to complete the renovation o
pshichka [43]

Answer:

consequential damages

Explanation:

According to my research on different types of law suits, I can say that based on the information provided within the question Bill can recover the 900 he lost from Carl as consequential damages. These are damages have happened because of one party's failure to meet a certain deadline or contractual obligation and can be proven in court. Therefore since Bill can prove that he lost the 900 because of Carl's negligence he will most likely win that case.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

5 0
3 years ago
Smashed pumpkins co. Paid $200 in dividends and $624 in interest over the past year. The company increased retained earnings by
Maru [420]

Dividends that were paid last year = $200

Retained earnings = $522

Net Income = Retained earnings + Dividends paid = 200+522 =722

Tax rate was 38%.

Earnings before tax (EBT) = Net income/ (1-tax rate) =722/(1-0.38) = 1,164.52

Interest expense= 624

Earnings before interest and tax (EBIT) = EBT + interest expense = 1,164.52 + 624 = 1,788.52

Earnings before interest and tax (EBIT) = 1,788.52


3 0
3 years ago
If nominal gdp is $12 trillion and real gdp is $10 trillion, then the gdp deflator is
Juli2301 [7.4K]
<span>If nominal gdp is $12 trillion and real gdp is $10 trillion, then the gdp deflator is: </span><span>120, and this indicates that the price level has increased by 20 percent since the base year.</span>
<span>
GDP deflator reflect the effects of new prices to the product that produced domestically. 
It calculated with this equation:

GDP Deflator = GDP Nominal/Real GDP x 100

= 12 Trllion /10 Trillion   x 100
= 120</span>
6 0
3 years ago
Other questions:
  • When is audio conferencing most successful?
    10·2 answers
  • What is the elastic clause and how does it help the constitution remain relevant?
    12·1 answer
  • MarketPoint Sales currently has a credit limit of $5,000. Because MarketPoint Sales has an excellent credit rating, BITS is incr
    15·1 answer
  • Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to employ minors i
    5·1 answer
  • Using the following information, prepare a bank reconciliation for Hintz Company for July 31, 2022. a. The bank statement balanc
    7·1 answer
  • The relevant range of activity refers to the_______________.
    13·1 answer
  • Suppose the money supply (as measured by checkable deposits) is currently $700 billion. The required reserve ratio is 25%. Banks
    5·1 answer
  • On january 1, salow company enters into a contract to provide custom-made equipment to byhi corporation for $100,000. the contra
    14·2 answers
  • Line Corporation's balance sheet showed the following amounts for their liability and stockholders' equity accounts: Current Lia
    7·1 answer
  • What are the five categories of expenditures for which net proceeds from the lottery can be used?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!