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
yKpoI14uk [10]
3 years ago
10

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $14,000 eac

h, with the first payment occurring today on your child’s 12th birthday. Beginning on your child’s 18th birthday, the plan will provide $25,000 per year for four years. What return is this investment offering?
Business
1 answer:
Alchen [17]3 years ago
5 0

Answer:

Ans. the rate of return of this invesment is 3.5278% annual.

Explanation:

Hi, what we need to do here is to find the future value of all six payments, beginning when the child turns 12, which will end when he turns 17. One year later (when the child turns 18) he will receive $25,000 per year, for the next 4 years. This is the equation that we need to use (and solve for "r").

\frac{A_{1}((1+r)^{6}-1)  }{r} =\frac{A_{2}((1+r)^{4}-1)  }{r(1+r)^{4} }

Where:

A1=$14,000

A2=$25,000

So, everything should look like this

\frac{14,000((1+r)^{6}-1)  }{r} =\frac{25,000((1+r)^{4}-1)  }{r(1+r)^{4} }

As you can see, this would take forever to solve, so what we have to do is to use MS Excel, we have to use the "Goal Seek" function. Please check the MS Excel spread sheet attached to this answer.

Please use this function with the following parameters.

Set Cell: G7

To Value: 0

By changing cell: G2

Ans. 3.5278%

Best of luck.

Download xlsx
You might be interested in
What was the effect of coronavirus on the economy?
Alexeev081 [22]
When everyone had to quarantine people didn’t buy as much stuff and businesses were shut down
3 0
4 years ago
Read 2 more answers
Which accounting principle requires to keep personal financial information separate from the financial information of Bogswell L
pantera1 [17]

The accounting principle of business entity principle  that personal financial information be kept separate from Bogswell Legal Services' financial information.

The owner of the entity and the entity itself are regarded two independent elements under the business entity concept. This law normally applies to corporations registered with the government. In such a setup, all data filings will be done separately for both the owner and the entity.

The business entity concept in accounting raises the owner's responsibilities anytime corporate capital is used for personal purposes. It holds the company and its owner accountable for their respective financial commitments. This idea also applies to business owners who own many enterprises.

To know more about business entity concept click here:

brainly.com/question/13185842

#SPJ4

4 0
2 years ago
Suppose that the Fed had followed the Taylor rule before the financial crisis of 2008. In the first quarter of​ 2007, the inflat
shutvik [7]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

4 0
3 years ago
The economy of the United States is often described as:
lord [1]
The answer would to that would be A
3 0
4 years ago
Compute the price of a 6.3 percent coupon bond with 15 years left to maturity and a market interest rate of 7.0 percent. (Assume
IgorC [24]

Answer:

Price of the Bond = $935.63

Explanation:

N = 15 x 2 = 30

I/Y = 7.0%/2 = 3.5%

PMT = 6.3% x 1000 / 2 =  31.5

FV = 1000

Using the Ms Excel Function

Price of the Bond = PV(N, I/Y), PMT, FV)

Price of the Bond = PV(30, 3.5%,  31.5, 1000)

Price of the Bond = $935.6278411

Price of the Bond = $935.63

5 0
3 years ago
Other questions:
  • Do units of metric measurement get period after abbreviation
    11·1 answer
  • Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
    5·1 answer
  • is the degree to which both businesses and customers believe that the pricing is reasonable. a. customer-led pricing b. fair pri
    12·1 answer
  • Burchell Company purchased land and a building for a lump sum cost of $420,000. The land has a fair market value of $160,000 and
    12·1 answer
  • Skrillex Inc. had the following current accounts last year. ($000) Beginning Ending Beginning Ending Cash $ 175 $ 238 Accounts p
    15·1 answer
  • Hewitt Bank quotes a value for the Japanese yen (¥) of $0.007, and a value for the Canadian dollar (C$) of $0.821. The cross exc
    14·1 answer
  • A​ _______________ ensures that an​ organization's logistics choices are consistent with its overall business strategy and suppo
    8·2 answers
  • In the long run the prices charged by a firm in monopolistic competition will be
    6·1 answer
  • The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $7,000 and has an expected life
    5·1 answer
  • How do contact lists differ from an address book?
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!