Answer:
The amount to be invested today is $3604.78
Explanation:
This is a case of an ordinary annuity,to calculate the present value, the below formula is made used of:
PV=A*(1-1/(1+r)^N)/r
A is the annuity payment of $1000 for 5 years
r is the rate of return on the annuity of 12%
N is the duration of the annuity payment , that is 5years
PV=$1000*(1-1/(1+12%)^5)/12%
PV=$3604.78
In essence, in order to receive $1000 every year starting a year today for 5 years, the sum of $3604.78 must be deposited today at rate of return of 12% per year.
The amount required would be been different if the first payment of $1000 is due today
Answer:
the franc would appreciate by 95% against ruble or in other words,exchange rate of franc ruble would depreciate 95% given 100% inflation in russia and 5% in switzerland
Explanation:
Give that
Inflation rate in russia = 100%
And inflation rate in switzerland = 5%
The difference in inflation = 100% - 5%
= 95%
The ppp says ruby would depreciate by 95% against the franc
So under purchasing power parity, exchange rate of franc /ruble would depreciate 95% given 100% inflation in russia and 5% in switzerland.
Or we say franc appreciates by 95% against ruble
Answer:
$3,176 , it's two months of interests $1,588 + $1,588
Explanation:
If the company paid each month 1/12 of capital plus interest it means that it's necessary to deduct the total amount of interests paid each month.
The company paid $25,588 and the monthly capital it's $24,000, therefore the company paid on interest an amount of $1,588 each month.
The issue of a one year installment note means that the company repay the principal to the lender in a series of periodic payments, in this case each month pay principal plus interests
In the income statement we have to applied the accrual criteria which means that the company only recognize the interest paid in the past months, November and December.
