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Ne4ueva [31]
3 years ago
12

Homer deposited $3,000 this morning into an account that pays 5 percent interest, compounded annually. Bart also deposited $3,00

0 this morning at 5 percent interest, compounded annually. At the end of each period, Homer will withdraw his interest earnings and put into a new account that pays 8 percent interest, compounded annually. Given this, which one of the following statements is true?
a. ​Barb will earn more interest the second year than Andy.
b. ​Andy will earn more interest in year three than Barb will.
c. ​Barb will earn more interest the first year than Andy will.
d. ​Andy will earn compound interest.
e. ​After five years, Andy and Barb will both have earned the same amount of interest.
Business
1 answer:
Art [367]3 years ago
3 0

Answer:

The answer is "Option a".

Explanation:

In this question, each year Barb pays back the interest received. It will add depth to its principle during the first year. In this, the actual case, the interest for $3000 at  5% for the first year = $150, would be added to $3 000, and $31,50. In the second year, Barb should gain a 5% interest on $3150. Throughout the case of Andy, the second principle will be $3000 like it was at the end of the first year. Thus, Barb's second year is going to have more interest.

  • In choice b, It is wrong because Andy wants to withdraw its interest, this won't get irritated. He would also receive less interest per year than Barb.
  • In choice c, Its interest would not be the same for both in the first year.
  • In choice d, It is wrong because Andy wants to withdraw interest each year, no compound interest will arise.  
  • In choice e, No, not that. Andy won't earn the interest compounded so, the Barb will receive the interest multiplied. Therefore, for the five-year duration, Barb can earn more interest.
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Answer:

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Explanation:

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3 years ago
Regarding CRM, a _____ is a general method or type of interaction with a customer, such as a telephone or a customer service des
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8 0
3 years ago
Consider a firm with an EBIT of $500,000. The firm finances its assets with $2,000,000 debt (costing 6 percent) and 50,000 share
Schach [20]

Answer:

EPS is reduced by $1.92 and 42%

Explanation:

EBIT                      $500,000

Interest Expense ($120,000)     ($2,000,000 x 6%)

EBT                       $380,000

Tax 40%               <u>($152,000)</u>

Net Earninig         <u>$228,000</u>

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Change in Capital Structure.

EBIT                      $500,000

Interest Expense ($60,000)     ($1,000,000 x 6%)

EBT                       $440,000

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Net Earninig         <u>$264,000</u>

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