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
german
3 years ago
7

Suppose you have $1,000,000 today and starting a year from now you intend to spend this money over the next 30 years. Assume the

nominal rate of interest is 9.2%, inflation rate of 5% and the real rate of interest is 4%. How much can you spend annually in real dollar terms over the next 20 years to ensure constant spending in real terms?
Business
1 answer:
elena55 [62]3 years ago
7 0

Explanation:

Here Initial amount = $10,00,000

Nominal Interest Rate = 9.2%

inflation  Rate = 5%

Real Interest Rate = 4%

in question it was asked to give in real then we will use the real discount rate to know annual spent amount

Present Value = PMT×PVIFA ( at 4% and 20 years)

Therefore, PMT = Present Value of Cash / PVIFA ( at 4% and 20 years)

= 1000000 / 13.5903

= $73581.75

Where,  PMT = Annual Spent Amount

PVIFA = Present Value interest Factor Annuity

You might be interested in
During the current year, Paul, the vice president of a bank, made gifts in the following amounts: To Sarah (Paul's personal assi
nataly862011 [7]

Answer:

$78

Explanation:

Gifts made to customers or employees are deductible up to $25 per customer or employee:

  • Darryl $25 + $3 in wrapping costs
  • gifts to Darryl's wife is not tax deductible
  • Sarah $25
  • Veronica $25

total tax deductions = $78

8 0
3 years ago
When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would in
kupik [55]

Answer:

A credit to Common Stock for $25,000

Explanation:

Based on the information given in a situation where a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry for this issuance would include:A credit to Common Stock for $25,000

Dr Cash $250,000

Cr Common Stock 25,000

Cr Additional Paid-In Capital 225,000

($250,000-25,000)

3 0
3 years ago
Desertification is thought to be principally due to
Evgen [1.6K]
<span>If this question is from Weather Climate and the Biosphere part 4 then the answer to it would be that it is due to overgrazing by animals and due to poor agricultural practices i.e the grazing in the area was not regulated and it lead to decrease in the amount of grass holding the soil together and sand lost its moisture and became desert and other reason is explained as if the wrong type of agricultural practices are followed then it would lead to loss of all important nutrients like nitrogen from soil when will eventually lead to desertification</span>
3 0
3 years ago
Assume that the standard cost to make one finished unit includes 2 hour of direct labor at $8 per hour. During April, 22,000 dir
ruslelena [56]

Answer:

the labor rate variance is $16,000 unfavorable

Explanation:

The computation of the labor rate variance is shown below:

As we know that

Labour Rate Variance = ( Actual Rate - Standard Rate) ×Actual Hours Worked

= ($160,000 ÷ 22,000 direct labor hours - $8) × 22000  direct labor hours

= ($7.27 - $8) × 22000  direct labor hours

= $16,000 Unfavorable

hence, the labor rate variance is $16,000 unfavorable

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

5 0
3 years ago
Madeline runs a lawn cutting service. She anticipates some increased expenses in her personal life in the next six months, and w
Leya [2.2K]

Answer:

The correct option is A. Need or Deficiency.

Explanation: A need is something that is necessary for an individual to function and live properly, while deficiency can be used to denote a state of lack. Our needs are often the motivating factor behind us working to earn a living, however, different people work for different reasons.

In the scenario presented above, we can see that Madeline is motivated to take on more clients due to the fact that she perceives that her needs will increase.

Therefore, the correct option to this question is that Madeline's motivation is due to need or deficiency.

8 0
3 years ago
Other questions:
  • Diplomats typically work overseas. true or false
    5·2 answers
  • Why haven't the changes to campaign finance laws passed in 2002 been effective in stopping the flow of soft money?
    13·2 answers
  • 6. Calculating a country's population growth rate takes into account all of the
    6·2 answers
  • A cost accountant is developing a regression model to predict the total cost of producing a batch of printed circuit boards as a
    14·1 answer
  • Kindzi Co. has preferred stock outstanding that is expected to pay an annual dividend of $3.34 every year in perpetuity. If the
    14·1 answer
  • When a hard-copy document needs to be added to the ehr, the healthcare professional uses a ________________ to capture the docum
    15·1 answer
  • A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government
    10·1 answer
  • Ntex Ltd. issued 10,000, 10% Debentures of Rs.100 each at a premium of
    9·1 answer
  • How much money did he save by paying
    10·1 answer
  • PLEASE ANSWER AS MANY AS POSSIBLE!
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!