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svp [43]
3 years ago
11

Suppose you invest $1000 at an interest rate of 6%, compounded annually. Calculate the equivalent interest rate under continuous

compounding (find the interest rate r that would give the same result if interest were compounded continuously). Hint: You can consider the situation for 1 year (let t=1).
Business
1 answer:
Vikki [24]3 years ago
8 0

Answer:

The equivalent interest rate under continuous compounding is 5.8%

Explanation:

Annual compounding

A = P(1+r)^n

P = $1,000

r = 6% = 0.06

n = 1 year

A = 1000(1+0.06)^1 = 1000(1.06) = $1060

Continuous compounding

A = Pe^rt

A = $1060

P = $1000

t = 1 year

1060 = 1000e^r

e^r = 1060/1000 = 1.06

e^r = 1.06

r = ln 1.06 = 0.058 = 5.8%

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When recording depreciation, which of the following statements is true?
professor190 [17]

Answer:

D. None of the above are true.

Explanation:

As while recording depreciation, the total assets is decreased and the stockholder equity is also decreased as depreciation is a contra asset account

In the side of stockholder equity, the net income, the retained earning and the stockholder equity is decreased

whereas, the total asset is decreased as the amount of asset is reduced by deducting the accumulated depreciation amount

The journal entry is shown below for better understanding

Depreciation Expense A/c XXXXX

To Accumulated Depreciation XXXXX

(Being depreciation expense is recorded)

5 0
3 years ago
Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received
aleksley [76]

Answer:

A. $11,970

B. $11,890

C. January

Explanation:

a. Calculation for the after-tax cost if Isabel pays the $19,000 bill in December

After-tax cost=$19,000 - ($19,000 x 37%)

After-tax cost= $19,000 - $7,030

After-tax cost= $11,970

Therefore the after-tax cost if Isabel pays the $19,000 bill in December will be $11,970

b. Calculation for the after-tax cost if Isabel pays the $19,000 bill in January

First step is to calculate the cost before taxes

Cost before taxes = $19,000 - ($19,000 x 8%/12) Cost before taxes= $19,000 - $127

Cost before taxes= $18,873

Now let calculate the After-tax cost

After-tax cost = $18,873 - ($18,873 x 37%)

After-tax cost= $18,873 - $6,983

After-tax cost = $11,890

Therefore the after-tax cost if Isabel pays the $19,000 bill in January will be $11,890

c. Based on the above calculation for both a and b, Isabel should pay the amount of $19,000 bill in January reason that it has the lowest cost of debt of the amount of $11,890 compare to December which has the cost of debt of the amount of $11,970.

5 0
2 years ago
When companies set their dividend payout, they generally aim for a rate that is?
Svet_ta [14]
The companies set their dividend payout, they generally aim for a rate that is when it is sustainable. <span>The </span>dividend payout<span> ratio is the amount of </span>dividends<span> paid to stockholders relative to the amount of total net income of a company. The amount that is not paid out in </span>dividends<span> to stockholders is held by the company for growth. The amount that is kept by the company is called retained earnings.</span>
8 0
3 years ago
Company X has a good whistle-blowing program in place. Sara used the whistle-blowing system to alert management about a fraud be
dedylja [7]

Answer:

lack of anonymity

Explanation:

According to my research on whistle-blowing systems within organizations, I can say that based on the information provided within the question the major issue that the program seems to have is a lack of anonymity. All whistle-blower systems are designed to be completely anonymous so that anyone who uses the system to do the right thing and report people who are breaking the law or rules are not mentioned and face backlash from co-workers. Apparently, the system that Company X is either not anonymous or is not adhering to the anonymity policy.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0
3 years ago
What financial behaviors will typically lead to a low credit score everfi?
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Maxed out credit cards
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3 years ago
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