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yawa3891 [41]
3 years ago
8

Chuck has $2,500 invested in a bank that pays 4% annually. The length of time it will take for his funds to double is closest to

:
Business
1 answer:
Arada [10]3 years ago
7 0

Answer:

The answer is 17.67 years.

Explanation:

Present value is $2,500

Future value of the money to be double of the present value. This means the future value will be $5,000($2,500 x 2)

Interest rate is 4%

Number of years or periods to reach this $5,000 is unknown. So we are looking for this.

To compute this number of periods, lets use Financial calculator.

I/Y = 4; PV= -2,500; FV= 5,000; CPT N= 17.67 years.

Therefore, the number of years to accumulate to $5,000 is 17.67 years

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Inflation sometimes causes people to pay _____ capital gains tax than they ought to
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Inflation sometimes causes people to pay increasing capital gains tax than they ought to. When accounting for inflation, capital gains tax may rise if there was an increase in the real purchasing power of an asset when the value of the asset did not increase. If capital gains were adjusted in relation to inflation, the tax would be a zero value.

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3 years ago
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The Quick Buck Company is an all-equity firm that has been in existence for the past three years. Company management expects tha
labwork [276]

Answer:

$49.01 per Share

Explanation:

We can find the value of the unit share of company that will be dissolved at the end of year 2 by using the following formula:

<u>Current Price per Share = Value of Firm Today (Step1) / Number of Shares</u>

= $1,862,345 / 38,000 shares

= $49.01 per Share

<u></u>

<u>Step 1: Find the value of the firm in today's price by using the discounting technique</u>

Value of Firm Today = Cash Flow for Year 1 / (1+r)^1       +        Cash Flow for Year 2 / (1+r)^2

=  $860,000  / (1 + 11%)^1     +    $1,340,000 / (1 + 11%)^2

= $774,774  +   $1,087,571

= $1,862,345

7 0
3 years ago
Bethesda Water has an issue of preferred stock outstanding with a coupon rate of 5.50 percent that sells for $95.02 per share. I
azamat

Answer:

Cost of preferred stock will be 5.78 %

Explanation:

We have given par value = $100

Dividend rate = 5.5 %

So annual dividend =\frac{100\times 5.5}{100}=$5.5

We know that cost of preferred stock is given by =\frac{Annual\ dividend}{current\ price}

Current price is given as $95.02

So cost of preferred stock will be =  =\frac{Annual\ dividend}{current\ price}=\frac{5.5}{95.02}=0.0578=5.78 %

4 0
4 years ago
In 1880 five aboriginal trackers were each promised the equivalent of 100 Australian dollars for helping to capture the notoriou
SSSSS [86.1K]

Answer: If interest rate was 4%= $180.09. If interest rate was 8%= $317.22

Explanation:

Assuming that the aboriginal trackers were promised the $100 at the beginning of the year 1880 and the claim was also made at the beginning of the year 1995.

Number of years from 1880-1995 = 15 years

If the interest rate was 4%

= 100*(1+4%)^15

= $180.09

If the interest rate was 8%

= 100*(1+8%)^15

= $317.22

7 0
3 years ago
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