All categories

3 years ago

Suppose you are going to receive $13,200 per year for five years. The appropriate interest rate is 8.1 percent.

Business

1 answer:

sertanlavr [38]3 years ago

5 0

Answer:

a-1) Pv = 52549

a-2) Pv = 56822

b-1) Fv = 77570

b-2 Fv = 83878

Explanation:

b-1) Future value:

S= Sum of amount of annuity=?

n=number of fixed periods=5 years

R=Fixed regular payments=13200

i=Compound interest rate= .081 (suppose annualy)

we know that ordinary annuity:

S= R [(1+i)∧n-1)]/i

= 13200[(1+.081)∧5-1]/.081

=13200(1.476-1)/.081

= 13200 * 5.8765

S = 77570

a.1)Present value of ordinary annuity:

Formula: Present value = C* [(1-(1+i)∧-n)]/i

=13200 * [(1-(1+.081)∧-5]/.081

=13200 * (1-.6774)/.081

=13200 * (.3225/.081)

=52549

a.2)Present value of ordinary Due:

Formula : Present value = C * [(1-(1+i)∧-n)]/i * (1+i)

= 13200 * [(1- (1+.081)∧-5)/.081 * (1+.081)

= 13200 * 3.9822 * 1.081

= 56822

b-2) Future value=?

we know that: S= R [(1+i)∧n+1)-1]/i ] -R

= 13200[ [ (1+.081)∧ 5+1 ]-1/.081] - 13200

= 13200 (.5957/.081) -13200

= (13200 * 7.3544)-13200

= 97078 - 13200

= 83878

You might be interested in

_____ is the most common way to measure the standard of living in different countries. GDP per capita Nominal GDP Real GDP

Lady bird [3.3K]

The answer is GDP per capita. The Gross Domestic Product just shows the wealth of a nation as a whole since GDP is the value measure of the all the final goods and services produced over a period of time by a country. GDP per capita shows the average wealth per person (hence involves dividing the GDP of a country by its population).

8 0

3 years ago

Read 2 more answers

During the elaboration stage of an organization: Group of answer choices change management is the most important skill that huma

Leno4ka [110]

Answer:

change management is the most important skill that human resource personnel contribute.

Explanation:

Elaboration stage of an organisation is also called the maturity stage. It is characterised by different units being involved in making decisions.

This slows down speed of decision making.

At this stage there is a need for revitalisation and change in order to make the organisation more efficient.

Change management is the process by which employees in an organisation are prepared and supported when there are far reaching improvements to organisation structure.

It ensures a smooth transition by providing needed information and reducing the stress associated with organisational change.

This is a key skill needed by human resource personnel fusing the elaboration stage

7 0

3 years ago

An investment should be undertaken A) if the present value of the expected income stream associated with the investment is great

Alona [7]

Answer:

A) if the present value of the expected income stream associated with the investment is greater than the full cost of the investment project.

Explanation:

It is when the present value of the expected income stream associated with the investment is greater than the full cost of the investment project that the project is profitable. Most investments are undertaken with the aim of making profits.

The net present value can be used to determine if the present value of the expected income stream associated with the investment would be greater than the full cost of the investment project.

3 0

3 years ago

An economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionar

antoniya [11.8K]

Answer: reduced by $80 billion

Explanation:

An expansionary gap is when the actual output is more than the potential output. From the question, we are told that an economy is operating with output $400 billion above its natural level, and fiscal policymakers want to close this expansionary gap and that the central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out.

We are also given the marginal propensity to consume is 4/5, and told that the price level is completely fixed in the short run.

To close the expansionary gap, the government would need to reduce its spending. To solve this, we have to calculate the multiplier. This will be:

Multiplier = 1/(1 - MPC)

= 1/(1 - 4/5)

= 1/1-0.8

= 1/0.2

= 5

Therefore, the government expenditure or spending will be reduced by:

= $400 billion/5

=$80 billion

3 0

3 years ago

A classmate excitedly tells you of what he believes to be a good deal. He goes on and on about signing up for a free 30-day tria

Nikitich [7]

Answer:

reciprocity principle

Explanation:

A reciprocity principle is a form of socio-psychological principle in which individuals generally tend to pay back in good, and in any form of capacity for whatever favor they receive.

Hence, in this case, the music company is hoping the the "reciprocity principle" will work on consumers that subscribe to free music as they might wish to give back to the company based on consumers feeling indebted to them for all the free music that was streamed

8 0

3 years ago