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MrRa [10]
3 years ago
13

Ou have $11,122.76 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until yo

ur account totals $210,000. you expect to earn 12% annually on the account. how many years will it take to reach your goal?
Business
1 answer:
Sav [38]3 years ago
8 0
This one is tricky, only because you aren't sure if they are adding the percentage before you deposit 4,000 more, or after.  Since both are annually.
But I would add 11,122.76 and 4,000 =15,122.76 add 12% which is 1814.73 making your total for the first year = 16,937.49. 

Then assume it again, you add 4,000.  That's 20,937.49

add 12% of 20,937.49 which is 2512.50 so that equals =23,449.99 by the end of year 2.

so add 4,000 again, that's 27,449.99

find 12% and add it to get =3294 add that to the total =30,743.99 by year 3.

(I'm sure they want you to round, which I keep doing with my decimals, but it'll probably go faster if you round ahead of time, but I'm trying to be accurate)

Keep going....

34,743.99 which 12% added is 4169 or a total of $38,912.99 by end of year 4.

add 4,000 to get =42,912.99 and 12% that's roughly a total of 48,063 rounded by the end of year 5.

52,063  at 12% 58,310 by year 6.

58,000 add 12% = 64,960 at end of year 7
68,960 add 12%= 77235 at year 8

81,235 add 12% =90,983 by year 9

94,983 add 12% =106,380 by year 10 (this is where you can assume that they'd want you to double it and it's be 20 years and 210,000.  But in real math, the amount is increasing so much because it's 12% of the current balance)

123,626.56 year 11

142,942 by year 12

164,574 by year 13

188,803 by year 14

203, 939 by year 15

So you'd go over 210 by year 16.

Now again, this depends if they add the 12% before or after you deposit 4,000 each year.  It also has to have an easier equation, but to be accurate I did it this way.  I'm sure that they want you to do like x=years and you'd go 11,122.76+4,000 multiplied by 12% and then try different years to see the number you get until you'd come to 16.





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2 years ago
BJT Corporation is owned 40 percent by Bill, 30 percent by Jack, and 30 percent by the Trumpet Partnership. Bill and Jack are fa
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3 years ago
Huxley Building Supplies' last free cash flow was $1.75 per share . Its free cash flow growth rate is expected to be constant at
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$40.6344 per share

Explanation:2.

Complete question <em>"Huxley has $5 million in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price?"</em>

<u>Calculation of the value of firm is as below</u>

Yr      Cash flow  Growth rate   New c.flow   Pv at 12%   Pv of cash flows

1            1.75                 25%            2.1875         0.893              1.9534

2           2.1875             25%            2.7344        0.797               2.1793

TCM                                                48.3083      0.797               <u>38.5017</u>

                                                      Value of firm                        <u>42.6344</u>

<u />

Note: TCM = Terminal cash floe = 2.7344*(1.06) / 12% - 6% = 48.3083 million

Now, Market value of firm = 42.6344 + 5 - 7 = 40.6344 million

Market price per share = $40.6344 million/1 million = $40.6344 per share

6 0
3 years ago
You take out a car loan for 13,381 dollars. If your loan has an annual interest rate of 8.86 percent, and you will make monthly
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Answer:

Principal paid in the first payment =$2,656.52

Explanation:

L<em>oan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest</em>.  

We will use the following relationships:

Interest paid = Interest rate × loan balance

Principal paid = Monthly installment - Interest paid

Monthly installment  = Loan amount/Annuity factor

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r - annual interest rate

n- number of period = 12× 5 = 60

Monthly interest rate - 8.86/12 =0.738 %

Loan amount = 13,381

Annuity factor = (1 - (1.00738)^(-60) )/ 0.00738=48.336

Monthly interest payment = Loan amount/Annuity factor

                                         13,381/48.336=2,755.32

Interest due in the first month = interest rate × loan amount

                      =  0.738 %×  13,381 =98.796

Principal aid in the first year = Monthly installment - interest due 1st month

                      = 2,755.32 - 98.796 = 2,656.52

Principal paid in the first payment =$2,656.52

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