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valentinak56 [21]
4 years ago
7

You just received a $5,000 gift from your grandmother which you have decided to save and then gift to your grandchildren 50 year

s from now. How much additional money will you gift if you earn 7.5 percent interest rather than 7 percent interest over the next 50 years?
Business
1 answer:
svetlana [45]4 years ago
6 0

Answer: Difference = $185,948.5 - $147,285. = $38,663.5

Explanation:

To calculate the future value,  you have to use the formula

fv = PA (1 + r/100)ⁿ

where

FV = future value

PA = Present Amount

r = rate

n = number of years

calculating for the future value if you earn a percent of 7.5 =

fv = 5,000 (1 + 0.075) ⁵⁰

fv = 5,000 ( 1.075)⁵⁰

fv = 5,000 (37.1897)

fv = 185,948.5  

calculating the Fv when the rate is 7%

fv = 5,000 (1 + 0.070) ⁵⁰

fv = 5,000 ( 1.070)⁵⁰

fv = 5,000 (29.4570)

fv = 147,285

Then find the difference between the Fv when the rate is 7.5 and when the rate is 7

Therefore difference = $185,948.5 - $147,285. = $38,663.5

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Carter Company reported the following financial numbers for one of its divisions for the year; average total assets of $4,100,00
sveticcg [70]

Answer:

$193,000

Explanation:

                              Carter Company

Sales                                                         4,525,000

Cost of goods sold                                  <u>-2,550,000</u>

                                                                1,975,000

Operating expenses                                <u>-1,372,000</u>

Net Income                                               603,000

Average invested assets     4,100,000

Target income 10%                410,000       <u>410,000</u>

Residual income                                       <u>$193,000</u>

5 0
4 years ago
What is the present value of a security that will pay $38,000 in 20 years if securities of equal risk pay 11% annually? Do not r
leonid [27]

Answer:

$4,713

Explanation:

The formula and computation of the present value are shown below:

= Future value ÷ (1 + rate)^number of years

= $38,000 ÷ (1 + 0.11)^20

= $4,713

This (1 + rate)^number of years is also known as the discount factor which helps to calculate the amount of the present value

We simply apply the above formula so that the accurate value can come

3 0
3 years ago
Correct the single error in each of the following sentence. A week later, you browses through the trend reports​
Sergio [31]

Answer:

A week later, you browse through the trend reports.

6 0
3 years ago
A 37-year old individual purchases a life insurance policy of $95,000 for an annual payment of $250. based on a insurance report
Sergeeva-Olga [200]

Answer:Expected value = - 94661.45

Explanation:

The Policy pay out is $95000 ,if a client is in life threatening accident insurance company will loose $95000, if the client is not in a life threatening accident the insurance company will gain $250

Probability (Client is in a threatening accident) = 0.999063

Probability (not in a life threatening accident)= 1 - 0.999063 = 0000937

Insurance Premium = $250

Insurance Payout = $95000

expected value = 0.999063 x (- (95000 - 250)) + 0.000937 x (250)

expected value = 0.999063 x (-94750) + 0.000937 x (250)

expected value = - 94661.21925 + 0.23425 = - 94661.44675

expected value = - 94661.45

8 0
3 years ago
Read 2 more answers
True or False: In a competitive labor market, increasing the minimum wage always raises the number of employed workers.
Brrunno [24]
I believe it’s true
4 0
3 years ago
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