1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
The following is a December 31, 2021, post-closing trial balance for Almway Corporation.
balandron [24]

Answer:

TOTAL ASSETS $1,043,000

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000

Explanation:

Preparation of a balance sheet for the Almway Corporation at December 31, 2021.

ALMWAY corporation

Balance sheet at December 31,2018

ASSETS

Current Assets

Cash and cash equivalent$47,000

($79,000-$32,000)

Short term investment $97,000

($144,000-$47,000)

Account receivable net of allowances $77,000

Inventories $217,000

Prepaid insurance $5,000

TOTAL CURRENT ASSETS $443,000

INVESTMENT

Marketable securities $47,000

Land held for sale $42,000

Restricted cash $32,000

TOTAL INVESTMENT $121,000

Plant property and equipment

Land $82,000

($124,000-$42,000)

Building $437,000

Accumulated deperation Building ($117,000)

Equipment $127,000

Accumulated deperation Equipment ($77,000)

NET PLANT PROPERTY AND EQUIPMENT $452,000

INTANGIBLE ASSETS

Patents ( net of amortization) $27,000

TOTAL ASSETS $1,043,000

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities

Account payable $109,000

Interest payable $37,000

Note payable due in 6 months $47,000

Current maturity of long term debt notes payable $13,400

TOTAL CURRENT LIABILITY $206,400

LONG TERM LIABILITIES

Notes payable $120,600

($181,000-$47,000-$13,400)

Bond payable $257,000

TOTAL LONGTERM LIABILITIES $377,600

SHAREHOLDER EQUITY

Authorised 500,000 shares

Issued and outstanding shares $351,000

Retained earnings $108,000

Total shareholders equity $459,000

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000

6 0
3 years ago
Chance to win 50 points
Elenna [48]

Answer:

2nd place

Explanation:

I feel like this is the right answer, I'm just guessing.

8 0
2 years ago
Read 2 more answers
In an open economy, national saving equals a. domestic investment. b. domestic investment plus net capital outflow. c. domestic
egoroff_w [7]

In an open economy, national saving equals to domestic investment and net capital outflow

Explanation:

In an open economy national saving as considered or calculated an equal to the domestic investment and net capital outflow.

The savings saved by the households are generally deposited in the the banks accounts and banks use this amount to give loans to the business organisation and they make money from these loans.

Apart from this, countries also invests in the other foreign countries which is also considered as domestic (national) saving.

7 0
3 years ago
Trade between individuals and between nations leads to: Trade between individuals and between nations leads to: higher product p
kondor19780726 [428]

Answer:

The correct answer is B.

Explanation:

Trade between individuals and between nations leads to: Increased Specialization

3 0
2 years ago
Which of the following actions will help to ensure that formal business documents are trust worthy
sladkih [1.3K]
<h3><u>Full Question:</u></h3>

Which of the following actions will help to ensure that formal business documents are trustworthy?

A: Using a wide variety of charts and tables

B: Putting the decision-related information first

C: Getting information from reliable sources

D: Requiring a password to open the document

Getting information from reliable sources  will help to ensure that formal business documents are trust worthy.

<h3><u>Explanation:</u></h3>

Business documents refers to the record, books, files, plants, correspondence, reports, documentation,etc and details associated with the financing activities of the business. They can be in the form of paper works, electronic format, etc. It is very essential for any business to contain these information that can be handed over to the stakeholders, public,etc  when any issues occurs financially or legally.

There are many things that are to be followed while  preparing these documents. The information that are included in this document must be collected from reliable sources. This is because it should not be proven to be false during any legal or financial issues.

6 0
3 years ago
Other questions:
  • When should supplies be recorded as an expense?
    7·1 answer
  • At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed) to make an MP3 player at full capacity that normally
    7·1 answer
  • The before-tax income for Ivanhoe Co. for 2020 was $104,000 and $81,200 for 2021. However, the accountant noted that the followi
    14·1 answer
  • Candice’s first job was at the grocery store making deli food. While in culinary school, she worked part time in a restaurant ki
    10·1 answer
  • Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom
    6·1 answer
  • Calculate the total revenue if the firm produces 10 versus 9 units. Then, calculate the marginal revenue of the 10th unit produc
    13·1 answer
  • working capital is defined as A. All assets available for sale after long term debt is paid off. B. The assets that the company
    11·1 answer
  • MC Qu. 17 Tower Company planned to produce 3,000 units... Tower Company planned to produce 3,000 units of its single product, Ti
    15·1 answer
  • Why did Henry Gantt suggest that frontline supervisors should receive a bonus for each of their workers who completed their assi
    5·1 answer
  • Care must be taken involving capital investment decisions, since normally a long-term commitment of funds is involved and operat
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!