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
Serjik [45]
4 years ago
12

Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will ad

minister it. As you’ve committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit____________ (rounded to the nearest whole dollar) so that you can fund the scholarship forever—assuming that the account will earn 6.00% per annum every year.
a. $111,111
b. $88,889
c. $100,000
d. $133,333

The bank representative just reported that he misquoted the available interest rate on the scholarship’s account. Your account should earn 4.75%. The amount of your required deposit should be revised to______ .

a. $60,715
b. $53,572
c. $71,429
d. $67,858

This suggests there is________ relationship between the interest rate earned on the account and the present value of the perpetuity.

a. A direct
b. An inverse
Business
1 answer:
Paul [167]4 years ago
3 0

Answer:

the answer for the first question is $166667.

the answer for the second question is $210526

the answer for the third question is An inverse.

Explanation:

given information that i will invest in a $10000 scholarship that will pay forever.

the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :

Pv of perpetuity= Cf/r

where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.

Pv of Perpetuity= $10000/6%

                           =$166667 therefore i must invest this amount to get the scholarship running with streams of $10000 forever.

in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :

Pv of perpetuity = $10000/4.75%

                              =$210526 therefore this is the amount to be invested for a forever $10000 stream of incomes for a scholarship.

the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.

You might be interested in
Lists two things that both increase the money supply?
DENIUS [597]

Answer:

Decrease is taxes

Increase in government spending

Explanation:

Government policies that increases the money supply in an economy is known as expansionary fiscal policy. They are:

1. Decrease is taxes - when government reduces the tax rate, the amount paid as taxes falls and as a result individuals, companies have higher disposable income whuch can be used for consumption or saving. This increases the money supply in the economy.

2. Increase in government spending - if the government increases it's spending on public goods for example, money supply would increase. If the government constructs a road, labour would be employed and paid wages. This payment increases the income of Labour and money supply increases.

Central bank policies that increases money supply are known as expansionary monetary policies. They include:

1. Open market purchase: The central bank purchase securities from the open market to increase money supply.

2. Reduction in reserve requirement ratio : if the reserve requirement ratio is reduced , commercial banks would have more money to give out as loans and this would increase money supply.

6 0
3 years ago
Hadley Corporation issued 200,000 shares of $5 par value common stock for $25 per share. During that year, the corporation susta
kari74 [83]

Answer:

D : common stock of $1,000,000

Explanation:

Hadley Corporation

Issued shares × par value common stock

Issued shares 200,000

Par value common stock $5

Hence:

200,000 x $5

= $1,000,000

Therefore the year-end balance sheet would show a common stock.of $1,000,000

8 0
3 years ago
Jessica is currently a freshman in college who wants to work for the health, safety, and environmental management career pathway
Gala2k [10]

Answer:

The answer is A. Jessica should get her bachelor’s degree and try to intern with a brownfield redevelopment specialist.

Explanation:

Brownfield Redevelopment Managers help make contaminated lands reusable. So, that would fall into the Health, Safety, and Environmental  management career pathway. It's not C because you would need to have a Bachelors degree to be a Health and Safety specialist. The other options are self explanatory.

5 0
3 years ago
Read 2 more answers
Select the correct answer. According to Maslow’s hierarchy of needs, which need consists of an individual striving for importanc
shutvik [7]

Answer:

According to Maslow's hierarchy of needs, self esteem consists of an individual striving for importance.

Explanation:

  • Maslow's hierarchy of needs suggests that people have various needs, and they must satisfy the basic needs before moving on to satisfy advanced needs.
  • There are five different levels of needs according to Maslow.
  • They are:
  1. Physiological needs-
  2. Security and safety needs
  3. Social needs
  4. Self esteem
  5. Self actualization
  • The lower four needs are deficiency needs that arise due to deprivation. Satisfying the physiological,social,security and esteem needs is important to feel content.
  • The highest level of need is growth need.They arise from the desire to grow as an individual.
4 0
4 years ago
Do all choices have costs?
expeople1 [14]
For every choice you make, you are sacrificing something else. For example, when you choose to buy a new phone, you are sacrificing buying a new laptop. The opportunity cost of buying the phone, is the cost of the laptop. Therefore, evey choice has a cost, because in every choice, there is a sacrifice
5 0
3 years ago
Other questions:
  • Fair value option; bond investment; effective interest [LO12-1, 12-2, 12-3, 12-4, 12-8] Fuzzy Monkey Technologies, Inc., purchas
    14·1 answer
  • A hurricane has disrupted operations at one of your company's facilities and shut down operations completely for several of your
    10·1 answer
  • Changing prices to attract customers is most difficult in a
    14·1 answer
  • All of the following are considered benefits of free trade EXCEPT A) quota reduction. B) growth of trade. Reactivate C) protecti
    5·1 answer
  • Florence’s Florals, a retail business, started a $250 petty cash fund on June 1. Below are descriptions of the transactions to e
    12·1 answer
  • The management of Madeira Computing is considering the introduction of a wearable electronic device with the functionality of a
    14·1 answer
  • Integrated communications are necessary to achieve situational awareness. (True/False)
    14·1 answer
  • Talia, a project manager, estimates that a project will take a year to complete. She gets the estimation approved, although it i
    15·1 answer
  • Broker Eric secure the loan for buyer Paul the fees that Eric charges Paul for making the loan could be which of the following a
    9·1 answer
  • Tight monetary policy theory dictates that when the economy is faced with inflation, the government should:______
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!