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3 years ago

8

Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for

their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 7%. The parents deposit $2000 on their daughter's first birthday and plan to increase the size of their deposits by 5% each year. Assuming that the parents have already made the deposit for their daughter's 18th birthday, then the amount available for the daughter's college expenses on her 18th birthday is closest to:A) $42,825B) $97,331C) $67,998D) $103,063

1 answer:

tankabanditka [31]3 years ago

5 0

Answer:

$97,331.30

Explanation:

To calculate the amount available on the daughter's 18th birthday the following should be taken into cognisance

First, the yearly deposit increases by 5% every year, therefore year one is $2,000 but year 2 is $2,000 x1.05= $2,100 and continuing like that.

Secondly, the total deposit pre year is calculated as annual deposit for the year (1+interest rate)∧year on a descending basis.

It is therefore as follows;

Years Annual deposit Total value of deposit including interest

1 $2,000.00 $2,000(1+0.07)∧17= $6,317.63

2 $2,100.00 $2,100(1+0.07)∧16= $6,199.54

3 $2,205.00 $2,205(1+0.07)∧15=$6,083.66

4 $2,315.25 $2,315.25(1+0.07)∧14=$5,969.95

5 $2,431.01 $2,431.01(1+0.07)∧13=$5,858.36

6 $2,552.56 $2,552.56(1+0.07)∧12=$5,748.86

7 $2,680.19 $2,680.19(1+0.07)∧11=$5,641.41

8 $2,814.20 $2,814.20(1+0.07)∧10=$5,535.96

9 $2,954.91 $2,954.91(1+0.07)∧9=$5,432.48

10 $3,102.66 $3,102.66(1+0.07)∧8=$5,330.94

11 $3,257.79 $3,257.79(1+0.07)∧7=$5,231.30

12 $3,420.68 $3,420.68(1+0.07)∧6=$5,133.52

13 $3,591.71 $3,591.71(1+0.07)∧5=$5,037.56

14 $3,771.30 $3,771.30(1+0.07)∧4=$4,943.40

15 $3,959.86 $3,959.86(1+0.07)∧3=$4,851.00

16 $4,157.86 $4,157.86(1+0.07)∧2=$4,760.33

17 $4,365.75 $4,365.75(1+0.07)∧1=$4,671.35

18 $4,584.04 $4,584.04(1+0.07)∧0=$4,584.04

Total $56,264.77 $97,331.30

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Suppose that the inverse demand equation is p = 100 minus 2Q and the supply equation is p = 2Q. If the price is controlled at

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3 years ago

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Answer:

$w_{d}$ = 0.3274 or, 32.74%

Explanation:

We know,

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Given,

Common Stock = 4,000,000 shares

Share price = $21

Total common stock = No. of shares x share price

Total common stock = 4,000,000 shares × $21 = $84,000,000

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Share price = $10

Total preferred stock = $10 x 3,000,000 shares

Total preferred stock = $30,000,000

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Debt = 50,000 bonds x $1000 par x 1.11

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Total capital structure = $169,500,000

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Answer:

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In the current year, Borden Corporation had sales of $2,190,000 and cost of goods sold of $1,295,000. Borden expects returns in

NNADVOKAT [17]

Answer:

The entries are as follows

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Credit: Accounts Receivables $131,400

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Credit: Inventory on Sales on Returns $77,700

Explanation:

To derive the figure for Sales Refund payable for the year

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