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
disa [49]
3 years ago
11

Matt Christopher is a 25 year old mechanical engineer earning 60,000 dollars next year. He expects his salary to increase 5% yea

rly until retirement at age 65. If he saves 10% of his salary, and invests his money in a fund earning 9% compounding interest, how much will he have in his retirement fund?
Business
1 answer:
igomit [66]3 years ago
8 0

Answer:

After 40 years of working, and savings 10% of his salary per year, and his retirement account earning a 9% compounding interest rate, Matt should have $3,984,402 in his retirement account.

Explanation:

The reason this number is so high, is that his base salary is quite high ($60,000) and it increases by 5% each year during 40 years. At the end of year 40, his salary should be $402,85 per year. The 9% compounding interest rate is also high, it means that every dollar invested next year will generate $31.41 dollars in 40 years.

I solved this question by preparing a table on excel.

Download pdf
You might be interested in
On March 1, 2018, Shipley Resources entered into an agreement with the state of Alaska to obtain the rights to operate a mineral
N76 [4]

Answer:

B) $20,697.

Explanation:

For computing the accretion expense, first we have to determine the present value which is shown below:

Present value would be

= Annual cash flows × PVIF factor for five years at 10%

where,

Annual cash flows would be

= Probability × cash outflows + Probability × cash outflows + Probability × cash outflows

= 25% × $300,000 + 50% × $400,000 + 25% × $500,000

= $75,000 + $200,000 + $125,000

= $400,000

And, the PVIF would be 0.62092. Refer to the PVIF table

So, the present value would be

= $400,000 ×  0.62092

= $248,368

Now the accretion expense would be

= $248,368 × 10% × 10 months ÷ 12 months

= $20,697

The 10 months are computed from March 1 to December 31 and we assume the books are closed on December 31

4 0
3 years ago
On December 31, 2020, Lipton, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest an
Arisa [49]

Answer:

Lipton, Inc.

1. Stated interest = Annual interest/Face value of bonds * 100

= $240,000/$3,000,000 * 100

= 8%

2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100

= $263,250/$2,925,000 * 100

= 9%

3. The selling price of the bonds as a percentage of the face value

= $2,925,000/$3,000,000 * 100

= 97,5%

4. Journal Entries:

Date                Account Titles and Explanation    Debit          Credit

Dec 31, 2020 Cash                                           $2,925,000

                       Bonds Discounts                              75,000

                       Bonds Payable                                               $3,000,000

To record the issuance of the bonds at a discount.

5.   Journal Entries:

Date                Account Titles and Explanation    Debit          Credit

Dec 31, 2021  Interest Expense                         $263,250

                      Amortization of bond discounts                      $23,250

                      Cash                                                               $240,000

To record the payment of interest and amortization of discount.

Explanation:

a) Data and Calculations:

December 31, 2020

Face value of issued bonds = $3,000,000

Interest payment = December 31 annually

Unamortized Amount = $75,000

Price of issued bonds = $2,925,000 ($3,000,000 - $75,000)

Discount on bonds =           $75,000 ($3,000,000 - $2,925,000)

Schedule:

2020 Annual Interest Interest Expense Amortization Bond Carrying Value

                                                                                                $2,925,000

1            $240,000           $263,250           $23,250               2,948,250

1. Stated interest = Annual interest/Face value of bonds * 100

= $240,000/$3,000,000 * 100

= 8%

2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100

= $263,250/$2,925,000 * 100

= 9%

3. The selling price of the bonds as a percentage of the face value

= $2,925,000/$3,000,000 * 100

= 97,5%

Analysis:

December 31, 2020:

Cash $2,925,000 Bonds Discounts $75,000 Bonds Payable $3,000,000

December 31, 2021:

Interest Expense $263,250 Amortization of bond discounts $23,250 Cash $240,000

6 0
2 years ago
Marissa is buying vegetables. She can choose between carrots​, lettuce​, and green beans. She​ doesn't like green beans​, and af
Llana [10]
Chose carrots she might like enough more than the other food that was given
5 0
3 years ago
Diminishing marginal product explains why, as a firm’s output increases __________.
DerKrebs [107]

Answer:

The correct answer is d) The production function gets flatter, while the total-cost curve gets steeper.

Explanation:

Diminishing marginal product explains why, as a firm's output increases, The production function gets flatter, while the total-cost curve gets steeper.

A firm is producing x amount of units at a total cost of Y. If it were to increase production in 1 units, its total cost would rise.

3 0
3 years ago
The type of budget that budgets standard costs for the actual volume of production is a
Stella [2.4K]
<span>The type of budget that budgets standard costs for the actual volume of production is a flexible budget. In addition, a flexible budget is a specific kind of budget wherein it is heavily dependednt to the actual volume of an activity. In contrary to a static budget, it is considered to be more dynamic.</span>
6 0
3 years ago
Other questions:
  • On july 9, mifflin company receives a $8,500, 90-day, 8% note from customer payton summers as payment on account. what entry sho
    8·2 answers
  • Salon Products recently introduced a new all-natural shampoo. Logan, director of new product development, has just reviewed the
    11·1 answer
  • Small businesses create about __________ percent of the new jobs in the united states.
    12·1 answer
  • The benefits of a strategic business plan do not include _____.:
    8·1 answer
  • Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $5,300. On September 9, the custom
    14·1 answer
  • Select all the correct answers.
    14·1 answer
  • Various studies indicate that cost savings from a TMS helps an organization reduce freight costs by:____
    6·1 answer
  • About the Lagrangian method, select the correct statement: We can use it to solve consumer's utility maximization problems, but
    15·1 answer
  • The trial balance of Rollins Inc. included the following accounts as of December 31, 2021:
    14·1 answer
  • PLEASE HELP!!! I I WILL GIVE BRAINLY
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!