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Savatey [412]
3 years ago
8

Suppose you just bought an annuity with 9 annual payments of $15,400 at the current interest rate of 11 percent per year. a. Wha

t is the value of the investment at the current interest rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What happens to the value of your investment if interest rates suddenly drop to 6 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What happens to the value of your investment if interest rates suddenly rise to 16 percent?
Business
1 answer:
Dafna11 [192]3 years ago
3 0

Answer:

Instructions are listed below

Explanation:

Giving the following information:

Suppose you just bought an annuity with 9 annual payments of $15,400 at the current interest rate of 11 percent per year.

First, we need to determine the final value with the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Then, we can calculate the present value with the following formula:

PV= FV/(1+i)^n

A)i=11%

FV= {15400*[(1.11^9)-1]}/0.11

FV= $218,125.17

PV= 218,125.17/(1.11^9)= $85,270.53

B) i= 6%

FV= {15400*[(1.06^9)-1]}/0.06

FV= $176,966.27

PV= 176,966.27/(1.06^9)= $104,746.06

C) i= 16%

FV= $269,785.02

PV= $70,940.77

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Answer:

The correct option is C,$500

Explanation:

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principal is $25,000

stated interest is 8%

number of accrued months is 3

accrued interest =$25,000*8%*3/12=$500

The accrued interest is to be debited interest expense  because it is an increase in expense  and credited to interest payable as a liability

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Explanation:

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The information that you give the possible customer should include prices and any perks that they may receive for changing banks. In addition to giving the person literature, you can offer to explain your product in more details and the reasons why they should change banks.

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Brief Exercise 23-1 Lopez Company uses both standards and budgets. For the year, estimated production of Product X is 534,000 un
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Answer:

a. $6

b.  $3204000

Explanation:

Given:

  • Product X is 534,000 units
  • cost for materials $1,441,800
  • cost for labour: $1,762,200

(a) a standard cost

As we know standard cost is the cost of producing 1 unit and is recorded in a standard cost card. However, the cost of labor, materials and overhead are used to make a single unit, so

standard cost = unit variable cost =  the total cost / the total number of unit.

In this situation, the overheading cost is not gven, so the total cost:

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