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
aksik [14]
3 years ago
13

Mark Johnson saves a fixed percentage of his salary at the end of each year. This year he saved $2,000. For each of the next 5 y

ears, he expects his salary to increase at an 10% annual rate, and he plans to increase his savings at the same 10% rate. There will be a total of 6 investments, the initial $2,000 plus five more. If the investments earn a return of 13% per year, how much will Mark have at the end of six years?
Business
1 answer:
adell [148]3 years ago
3 0

Answer:

The correct answer is:

$17,437.28

Explanation:

First of all, let us lay out the particulars that will aid us in our calculations:

Amount saved in year 1 = $2000

Number of years saved in total = 6 years

annual rate of savings increase = 10% increase on the amount for that year to the next year

Annual return on investment = 13%.

Next, let us calculate the 10% increase in savings from years 2 to 6.

Year 1 investment = $ 2000

Year 2 investment = Year 1 saving + 10% of year one saving

hence, investment 2 saving = 2000 + (10/100 × 2000) = 2000 + (0.1 × 2000)

Year 2 investment = 2000 +200 = $2,200.

Year 3 investment = year 2 saving + (0.1 × year 2 saving) = 2200 + (0.1 × 2200)

year 3 investment = 2200 + 220 = $2,420

Year 4 investment = 2420 + (0.1 × 2420) = 2420 + 242 = $2,662

Year 5 investment = 2662 + (0.1 × 2662) = 2662 + 266.2 = $2928.2

Year 6 investment = 2928.2 + (0.1 × 2928.2) = 2928.2 + 292.82 = $3,221.02

Next, let us create a table to show the total amount for each year.

Note, to determine the 13% annual investment return on each year:

13% = 13/100 = 0.13. So, we will multiply the investment for each year with 0.13 to get the annual investment. It is shown hence:

Year   Investment (I) ($)   Annual return (AR) ($)    Total amount (I + AR) ($)

1             2000                   260                                     2260

2            2200                   286                                     2486

3            2420                   314.6                                   2734.6

4            2662                   346.06                               3008.06

5            2928.2                380.67                               3308.87

6            3221.02               418.73                                3639.75

Total                                                                             17,437.28    

                     

Therefore, at the end of 6 years mark would have $17,437.28 (approx. $17,437)

You might be interested in
Which of the following statements about marketing is true? Multiple Choice A marketing exchange focuses on making a single trans
klemol [59]

Answer:

Marketing only occurs when two or more parties are willing to exchange one thing for another thing.

Explanation:

It is understood that marketing only occurs when two or more parties are willing to exchange one thing for another thing.

5 0
2 years ago
Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year
Nastasia [14]

Answer: $‭196,800‬

Explanation:

The cash payments to suppliers for inventory purchases will be:

= Cost of goods sold - Decrease in inventory -  Increase in accounts payable

Decrease in inventory = 23,500 - 17,800

= $5,700

Increase in accounts payable

= 13,500 - 6,000

= $7,500

Cash to suppliers for inventory = 210,000 - 5,700 - 7,500

= $‭196,800‬

5 0
3 years ago
Carryon Company sells a product and a 12-month service package for that for a combined price of $800. Separately, the product an
anzhelika [568]

The part of the combined price allocated to the product is less than 50% which might be around 35-40%.

<u>Explanation:</u>

Since the price of the product all alone is $450 and the price of the service alone is $550, so the combined amount totals up to be nothing less than $1000. But the company under the discount and offer, offers the both things combined for $800.

This shows that the company is under some loss which it has to incur. The loss is of $200 under the discount to be offered to the clients which serves as the incentive to the customers.

3 0
3 years ago
Not adjusting the amounts reported in the financial statements for inflation is an example of which basic principle of accountin
Kaylis [27]

Not adjusting the amounts reported in the financial statements for inflation is an example of Monetary unit basic principle of accounting.

What is Monetary unit?

The monetary unit principle stipulates that only transactions that may be stated in terms of a currency should be documented. In other words, non-quantifiable items shouldn't be recorded in the financial statements of a company. Money has become a common measurement unit in accounting over time.

Therefore,

Not adjusting the amounts reported in the financial statements for inflation is an example of Monetary unit basic principle of accounting.

To learn more about monetary unit from the given link;
brainly.com/question/13415456

#SPJ4

8 0
1 year ago
Sid purchased an automobile for personal
Aloiza [94]

Answer:

Part A. $1200

Part B. $1200  

Explanation:

Part A.

Under MACRS rules, the depreciation rate for the 5 year recovery period asset would be:

Year 1    20%

Year 2   32%

Year 3   19.2%

Year 4   11.52%

Year 5   11.52%

Year 6   5.76%

This means that the first year MACRS depreciation deduction would be 20% which is $1200 ($6000 * 20%).

Part B.

If Sid does not elect Section 179 expensing then the depreciation would be calculated using straight line basis.

The depreciation would be:

Depreciaiton Expense = $6000 / 5 Years life   = $1200

8 0
3 years ago
Other questions:
  • A product mix is the combination of ___________ offered by a manufacturer. product lines loss leaders unsought goods and service
    6·2 answers
  • Since your first​ birthday, your grandparents have been depositing $ 1 comma 000 into a savings account on every one of your bir
    5·1 answer
  • IKEA sells a portable workbench called the FARTFULL. The product has many positive features, and in German or Swedish markets, t
    9·1 answer
  • [preparing trial balance] I am suppose to be preparing a trial balance but base on the accounts and information I have, I have t
    11·1 answer
  • International Finance Problem Set on Working Capital Management1. Rossignol Co. manufactures and sells skis and snowboards in Fr
    12·1 answer
  • 2. If a plant asset costs $6,000.00, has accumulated depreciation of $5,000.00, and is sold for $1,200.00, the gain or loss on d
    7·1 answer
  • . Understanding how shirking decreases team output Caroline sells bottled water from a small stand by the beach. On the last day
    10·1 answer
  • True or False. The primacy effect refers to the tendency to recall the items at the beginning and end of a list better than the
    7·1 answer
  • On April 1, the price of gas at Bob’s Corner Station was $3.80 per gallon. On May 1, the price was $4.30 per gallon. On June 1,
    10·1 answer
  • The history and development of economics as subject??​
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!