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GrogVix [38]
3 years ago
9

f the interest rate is 7.8% per year, approximately how long will it take for your money to quadruple in value? (Use the Rule of

72.) b. If the inflation rate is 4.9% per year, what will be the change in the purchasing power of your money over this period? (Use the Rule of 72 to compute the number of years. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Business
1 answer:
kondaur [170]3 years ago
6 0

Answer:

The rule of 72 establishes that, to determine the time in which an investment will double its initial capital through the generation of compound interest, 72 must be divided by the interest rate number of said financial investment.

In the present question, the interest rate is 7.8%, with which the investment would double in 9.23 years (72 / 7.8 = 9.23).

Now, at the same time there will be an annual inflation of 4.9%, that is, an accumulated inflation of 45.22% (4.9 x 9.23 = 45.22). In other words, the real growth of investment will not be 100%, but the accumulated inflation will have to be discounted from said number, with which the real growth of investment will be 54.88% over those 9.23 years.

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What are aspects of a free enterprise system?
Ierofanga [76]

Answer:

A free enterprise economy has five important characteristics. They are: economic freedom, voluntary (willing) exchange, private property rights, the profit motive, and competition.

Hope this helps!

7 0
3 years ago
You are given the following data on US Treasury. The maturity date is May 15, 2041. The asked yield-to-maturity is 2.128%. The c
babunello [35]

Answer:

$1,035.84

Explanation:

Number of years to maturity (Nper) = 20

Annual Coupon payment (PMT) = 1000*2.35% =$23.50

Payment at maturity (FV) = $1000

Yield to maturity (Rate) = 2.13%

<em>Using the MsExcel Present value function</em>

Clean(flat) price = PV(Nper, PMT, FV, Rate)

Clean(flat) price = PV(20, 23.50, 1000, 2.13%)

Clean(flat) price = 1035.8436

Clean(flat) price = $1,035.84

5 0
3 years ago
Baron Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. It
astraxan [27]

Answer:

WACC is 7.24%

After tax cost of debt is 3.95%

Explanation:

WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V

Ke is the cost of equity of 9% or 0.09

Kd  is the cost of debt at 5% or 0.05

Kp is the of preferred stock of 4% or 0.04

E is the weight of equity of 65% 0r 0.65

D is the weight of debt of 25% 0.25

K is the weight of preferred stock of 10% or 0.10

t is the tax rate of 21% or 0.21

WACC=(0.09*0.65)+(0.05*0.25*1-0.21)+(0.04*0.10)

WACC=(0.09*0.65)+(0.05*0.25*0.79)+(0.04*0.10)

WACC=7.24%

after tax cost of debt=pretax cost of debt*(1-t)

                                  =0.05*(1-0.21)

                                 =0.0395=3.95%

5 0
3 years ago
Consumers often use ________ as a popular substitute for cash payments due to the convenience and wide acceptance by merchants,
viva [34]

The correct answer is Credit cards.

What is a Credit card?

A credit card is a type of credit facility, provided by banks that allow customers to borrow funds within a pre-approved credit limit. It enables customers to make purchase transactions on goods and services. The credit card limit is determined by the credit card issuer based on factors such as income and credit score, which also decides the credit limit.

The advantages of credit card are:

  1. Hassle-free shopping experience.
  2. No need to carry cash.
  3. Rewards, cashback, and offers.
  4. Widely accepted.

To Learn more about credit score visit the link:

brainly.com/question/25668115?referrer=searchResults

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6 0
2 years ago
The supplies account had a beginning balance of $1,804. Supplies purchased during the period totaled $3,283. At the end of the p
mixer [17]

Answer: The adjusting entry is:

                                                                               Debit ($)         Credit ($)

Supplies expenses                                               4,648

Supplies                                                                                            4,648

<em>Being adjustment to account for supplies expenses incurred at year end</em>

Explanation: The supplies account is an asset account, so it has a debit balance. To arrive at the supplies expenses amount journalzed above, we have to do a movement schedule for the supplies account as follows:

Opening balance                                        $1,804

Purchases during the period                      3,283

Supplies expenses                                      (XXX)

Balance                                                           439

To get the value of XXX above, we do $1,804+3,283-XXX=439; using subject of the formula, XXX = $1,804+3,283-439 = $4,648.

8 0
3 years ago
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