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olga_2 [115]
3 years ago
6

A $3,000 annual contribution to a retirement account earning 6% will be worth ____ in 20 years.

Business
2 answers:
iris [78.8K]3 years ago
6 0

Answer:

$60,001.20

Explanation:

3,000 + 6% = 3,000.06 × 20 = 60,001.2

Bond [772]3 years ago
4 0

Answer with Explanation:

Question does not state what kind of interest, here are the three common possibilities:

1. Simple interest of 6%:

Future value (FV) = 3000*(1+0.06*20) = $6600

2. compounded annually:

Future value (FV) = 3000*(1+0.06)^20 = $9621.41 (nearest cent)

3. compounded monthly:

Future value (FV) = 3000*(1+0.06/12)^(20*12) = $9930.61 (nearest cent)

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Answer:

The correct option is e. The company's value of operations one year from now is expected to be 5% above the current price.

Explanation:

Free cash flow (FCF) refers to the cash that a company generates after taking into consideration cash outflows needed to support operations and maintain the capital assets of the company.

When the free cash flow of a company is expected to grow at a certain constant rate, the implication is that the the value of operations of that company one year from the current period is expected to be higher than the current price.

Based on the explanation above, the correct option is e. The company's value of operations one year from now is expected to be 5% above the current price.

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