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jeka94
3 years ago
13

Pete Morton is planning to go to graduate school in a program of study that will take three years. Pete wants to have $8,000 ava

ilable each year for various school and living expenses. If he earns 4 percent on his money, how much must he deposit at the start of his studies to be able to withdraw $8,000 a year for three years
Business
1 answer:
pochemuha3 years ago
4 0

Answer: $22,200.72

Explanation:

Given the following :

Amount Pete Morton wants to be able to withdraw each period = $8000

Number of periods = 3

Interest rate on deposit = 4%

The amount Pete must deposit at the beginning of his study to be eligible is the product of the payment per period and the present value of annuity factor.

From the present value of annuity factor table ; the factor obtained for a 3 years period at 4 % Interest rate is 2.77509

Hence,

$8000 × 2.77509 = $22,200.72

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Why is compound interest preferable to simple interest when investing?
lions [1.4K]

Answer:

O Compound interest pays interest both on the principal and the interest earned in each period.

Explanation:

Compound interest is preferred as it measures the interest on the principal amount and the accrued interest. In the compounding interest, the interest i.e. earned should be added to the principal in order to create the new principal amount. The interest earned at the closing of every year should be more than the last period as the principal amount rises at the starting of the period

Also, the interest earned via the compound interest should be grown much faster as we compared to the fixed rate interest

Therefore the last option is correct

3 0
3 years ago
In Japan, suppose Honda’s export price per vehicle is ¥4,000,000 and that the exchange rate is ¥125/$. The one-year Japanese yen
NemiM [27]

Answer:$31,379

Explanation:Applying the

Fishers international effect

1+Ic/1+Ib=S1/S0

Where Ib represents the interest rate in base country which is Japan in this case

Ic represents the interest rate in counter country in this case,US

S0 is the base spot rate or exchange rate at the moment while S1 is the spot rate at the end of the coming year

Ic =3%=0.03

Ib=1%=0.01

So=145

Substituting in the formula

1.03/1.01=S1/125

Cross multiplying

S1=125(1.03)/1.01=127.475

So price in US at spot 127.475 will be ¥4,000,000/127.475=$31,379

5 0
3 years ago
Less developed nations have high rates of unemployment.<br><br> TRUE<br><br> FALSE
alexira [117]
True.
Hope i helped out!
3 0
3 years ago
Read 2 more answers
Prahm Corp. wants to raise $4.4 million via a rights offering. The company currently has 500,000 shares of common stock outstand
Pavel [41]

Answer:

price for selling 3000 share right is $25060.87

Explanation:

Given data:

Total Amount raised=   $4,400,000  

Spreading rate = 6%

Subscription price =   $20 per share

Number of share owned by company = 500,000

Per share cost  = $45

Totals share own in the company = 3000

subscription price after deducting spreading rate = 20\times (1 -0.06) = $18.80

Now, Right share = \frac{4400000}{18.8} = 234,043

Right price is calculated as

Right price = ((Number of share held * market price) + (Right share *Right price))/( Number of share held + Right share)

plugging all value in above relation

                 = \frac{500000 \times 45 + 234043\times 18.8}{500000 + 234043}

Right share = $36.65

single right value = 45- 36.65 = $8.35

Price for 3000 share right = 8.35 *3000 = $25060.86

6 0
3 years ago
How can your sense of social structure affect your work with patients
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It can make them feel uncomforable and feel like you don't like them or make them feel a certain way that is not usually good
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