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
Explain why the order of operations is necessary for simplifying numerical expressions
Musya8 [376]
The order of operations is necessary for simplifying numerical expressions because it ensures that the expression is simplified correctly through a series of steps proven to be efficient in simplification.
3 0
2 years ago
At what point should consumers stop researching a product?
lana66690 [7]

Answer: when the research costs more than the potential savings

Explanation:

6 0
3 years ago
Read 2 more answers
Consider the old maxim, "build a better mousetrap and the world will beat a path to your door." discuss the meaning of this phra
MAVERICK [17]

In the context of time-based competition,  "build a better mousetrap and the world will beat a path to your door." could be interpreted as "those who make better innovations would obtain the most opportunities to obtain profit in the market"

Innovations only offers advantages in the competition because it offer different options for consumers that exclusively belong to US. But innovation is NOT THE ONLY factors for the product's success. There are other factors that can influence the success such as marketing strategies, condition of the economy

6 0
3 years ago
Yummy Peanut Butter created a new​ coconut-flavored peanut butter that it tested in a small number of representative cities. The
Sati [7]

Answer:

B.

standard test markets

Explanation:

Standard test markets is when a set of representative cities are selected and the full marketing mix is tested in these areas before a new product launch. The new products are sold through their normal channels to simulate reality.

Yummy peanuts is testing its new coconut flavored peanut butter in a group of representative cities. Aimed at forecasting national sales and profit. This is use of standard test markets.

4 0
3 years ago
The accounting cycle starts with a.closing out the periodic accounts. b.recording the transaction based on the information in a
saul85 [17]

Answer:

letter b, recording the transaction based on the information in a source document

Explanation:

The "Accounting Cycle" follows a series of steps in order to assist the accounting transactions of a company or business. It starts with the "Transaction step" <em>(the first step</em>) where<u> </u><u><em>the source documents have to be examined in order to analyzed transactions.</em></u> This also includes the recording of the transaction in the journal.

This step is followed by <em>Posting the Entries into the Ledger Accounts, Preparing the Unadjusted Trial Balance, Adjusting the Journal Entries, Preparing the Adjusted Trial Balance, Recording Reversing Entries, Preparing Post-Closing Trial Balance, Record Closing of Entries and Preparing Financial Statements.</em>

6 0
3 years ago
Other questions:
  • An individual who wants others to pay for public goods, but plans to use those goods for their own purposes, is often referred t
    7·2 answers
  • Which of the following policies are consistent with the goal of increasing productivity and growth in developing countries? Chec
    8·1 answer
  • Eric was in the store and started looking at riding lawn mowers. He didn't come to this store for the purpose of purchasing one,
    13·1 answer
  • Wage-push inflation is typically induced by
    8·1 answer
  • On February 1, 2020, Nash's Contractors agreed to construct a building at a contract price of $5,700,000. Nash's estimated total
    15·1 answer
  • I need help please &lt;3 I give brainly
    8·1 answer
  • Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn i
    15·1 answer
  • The slope of the budget constraint A. measures the rate at which the consumer can trade one good for another. B. equals the rela
    8·1 answer
  • Owing to his impulsive buying habits, Ronnie's unpaid credit card balances pile up to $9,000. As Ronnie does not have enough mon
    6·1 answer
  • If a firm hires an additional worker and discovers that its total output has fallen, then it must be true that:________
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!