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alisha [4.7K]
3 years ago
6

1. Assume you are planning to invest $200 each year for four years and will earn 8 percent per year. Determine the future value

of this annuity due problem if your first $200 is invested now.
Business
2 answers:
Virty [35]3 years ago
6 0

Answer:

The future value of the $200 invested yearly for 4 years at 8% is $973.32

Explanation:

The future value of an immediate annuity is given by the formula = (1+r)*[P*((1+r)^n-1)/r]

P=is the periodic payment of $200

r=rate of return=8 percent

n=number of years=4

By slotting the variables into the formula we have:

Fv=(1+0.08)*(200*((1+0.08)^4-1)/0.08)

FV=$973.32

Judging by the concept of time value of money, it is expected that the sum invested at interest would have been much more at maturity of the investment as $1 today should give a lot more than $1 in future.

kari74 [83]3 years ago
5 0

Answer:

$242.10

Explanation:P= C (1+(R/N)) ^T

P= Future Value  

C= Amount invested/ present value =$200

R= interest rate of invested amount = 8%

N= periods invested per year = 1

T= the number of years the amount is invested times by the number of periods invested per year. = 4years

Substitute the above values to the formulae P=C(1+(R/N))^T

Then you get :P=200(1+0.08)^4 thereafter you compute this on a calculator as value n=1 and T= 4*1= 4, then you get the below value of $242.097792 which is rounded off to the bottom answer of

P=$242.10

for the problem you solve for P given the other values which you substitute on the formula given above as it is mentioned that the interest is awarded annually. The number of periods n is 1 because it is annually compounded and the investment earns interest on interest because there is no withdrawal being don over the years in between being invested.

By using this formula you are showing that after a year if you invest $200 with an interest rate of 8% it will be $216 then this amount plus interest for year 1. $216 will be reinvested to earn an interest of 8% for the second year which the end vale will be $233.28. For the third year again the second years amount with its interest will be reinvested for 8% interest for the third year therefore calculated as $233.28*1.08= $251.94. then for the last 4th year we invest the third years amount at an interest rate of 8% which will be calculated as $251.9424*1.08=  $272.097792 then we round off to two decimal places for the final answer $272.10. That is how we got to the final answer.

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During the year, Hamlet Inc. paid $24,000 to have bond certificates printed and engraved, paid $90,000 in legal fees, paid $15,0
Vitek1552 [10]

Answer:

$359,000

Explanation:

Total Bond issue costs  can be calculated by adding all the cost related to the issue of bond.

Bond Certificate printing cost        =    $24,000

Legal fees paid                                =    $90,000

CPA registration                               =    $15,000

Underwriting Commission                =   $230,000

Total Bond issue costs                      =   $359,000

After adding all the cost we reached at 359,000 and its closest to Option A 360,000

4 0
3 years ago
Hannah allowed her friend Carol to borrow her laptop computer for a week during Thanksgiving Break. During that time Carol, with
prohojiy [21]

Answer:

Yes, these facts  are valid against Hannah which comes under Ratification Doctrine.

Explanation:

Here in the question its given that Hannah had allowed her friend to lend her computer for a one week period which was during her thanks giving break.

During those times Carol sold that laptop to a friend which was one of them in their class without asking hannah about this.

Now when after the break hannah and carol both return then carol told her that she had sold her laptop because she was getting an amount from the buyer which was too good to pass up so shesold it that moment.

Now when she gave that money to Hannah she instead of scolding her thanked her and her expression was seeming to be like she had done an awsome job for her.

So, based on the facts the contract was valid because it came under Ratification Doctrine.

6 0
4 years ago
Amber McClain. Amber McClain, the currency speculator we met in the chapter, sells eight June futures contracts for 500,000 peso
AnnyKZ [126]

Question Completion:

Note that the June Settlement Futures rate = $0.10773/Ps from the Exhibit 7.1 (not provided here).

Answer:

Amber McClain

a)  If spot rate = $0.12000/Ps:

The value of her position at maturity = -$49,000

b) If spot rate = $0.09800/Ps:

The value of her position at maturity = -$88,000

c) If spot rate = $0.11000/Ps:

The value of her position at maturity = -$40,000

Explanation:

a) Data and Calculations:

Notional selling price of June futures = 500,000 pesos

Number of contracts = 8

June Settlement Futures rate = $0.10773/Ps

a) If spot rate = $0.12000/Ps:

The value of her position at maturity = -Notional selling price * (Spot rate - Futures rate) * 8

= -500,000 * ($0.12000/Ps - $0.10773/Ps) * 8

= -500,000 * 0.01227 * 8

= -$49,000

b) If spot rate = $0.09800/Ps:

The value of her position at maturity = -Notional selling price * (Spot rate - Futures rate) * 8

= -500,000 * ($0.12000/Ps - $0.09800/Ps) * 8

= -500,000 * 0.022 * 8

= -$88,000

c) If spot rate = $0.11000/Ps:

The value of her position at maturity = -Notional selling price * (Spot rate - Futures rate) * 8

= -500,000 * ($0.12000/Ps - $0.11000/Ps) * 8

= -500,000 * 0.01 * 8

= -$40,000

6 0
3 years ago
A string or rope will break apart if it is placed under too much tensile stress. Thicker ropes can withstand more tension withou
kifflom [539]

Answer:

a. radius = 0.0006m = 0.6mm and length =0.393m = 393mm

b. frequency =377.86Hz

Explanation:

Given:

mass of steel= 4g = 0.004kg

density of steel = 7890kg/m3

tensile stress of steel 7.0x10⁸

tension load =900N

from the density, we will calculate for the Volume of the steel string

density = mass/volume

volume = mass/density = 0.004/7890 = 5.07 x 10⁻⁷ m³

from the tensile stress will can get the maximum base Area of the string ,

tensile stress = load/area =

7x10⁸ = 900/A

A = 900/7x10⁸ = 1.29x10⁻⁶ m²

Area = πr²

area/pi = 4.105x10-7

radius = 0.0006m = 0.6mm

volume = Area x length

length = vol/area =(5.07 x 10⁻⁷ m³)/1.29x10⁻⁶ m² = 0.393m

b. the highest possible frequency is given by:

F = \frac{\sqrt{\frac{T}{m/L} }}{2L}

where T= tension, m=mass, L=length

F = \frac{\sqrt{\frac{900}{0.004kg/0.393m} }}{2*0.393m}

= 297.04/0.786

frequency =377.86Hz

4 0
3 years ago
Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset to
xz_007 [3.2K]

Answer: $8,400

Explanation:

Tax liability for a year is computed on the nominal capital gain as of that year not the inflation-adjusted gain. As such, should the asset be sold today, the capital gains tax of 28% will be computed on the capital gain of $30,000 in the following manner;

= 28% * 30,000

= $8,400

5 0
3 years ago
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