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
Fantom [35]
3 years ago
11

Your uncle is about to retire, and he wants to buy an annuity that will provide him with $75,000 of income a year for 20 years,

with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today
Business
1 answer:
Nataly_w [17]3 years ago
4 0

Answer:

The annuity will cost him $963,212.95.-

Explanation:

Giving the following information:

Cash flow= $75,000

Interest rate= 0.0525

n= 20

First, we need to calculate the final value. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i + {[A*(1+i)^n]-A}

A= annual cash flow

FV= {75,000*[(1.0525^20) - 1]/0.0525} + {[75,000*(1.0525^20)] - 75,000}

FV= 2,546,491.88 + 133,690.82= $2,680,182.70

Now, the present value:

PV= FV/(1+i)^n

PV= 2,680,182.70/(1.0525^20)

PV= $963,212.95

You might be interested in
To influence performance and satisfaction of subordinates, it is not recommended that the leader reduce frustrating barriers to
Stells [14]

Answer:

False

Explanation:

The reason is that the leader must always be guider in times of difficulty for the subordinates otherwise it would be more time consuming and would increase the cost to the company. The leaders are always adviced to help and train their team members to increase their productivity because experience and understanding of problem solution brings productivity.

3 0
3 years ago
"What are the real flows and money flows that run between​ households, firms, and governments in the circular flow​ model? The r
Shkiper50 [21]
C. The services of factors of production; factor



7 0
3 years ago
Read 2 more answers
Which of the following is not correct? a. The consumer price index gives economists a way of turning dollar figures into meaning
Marina CMI [18]

Answer:

The consumer price index is used to measure the quantity of goods and services that the economy is producing.

Explanation:

CPI  or consumer price index is a measure of changes in the average prices of a basket of products and services in a given time. The selected goods and services are a fair representation of consumption expenditure in the economy. Economists use the CPI as a Macroeconomic indicator of inflation.

As a measure of inflation, the CPI statistics communicate increases or decreases in the prices of goods and services in the economy. It forms a basis for policy decisions by the government that aid in the prevention of reduced purchasing power of the dollar.  CPI is all about changes in prices and nothing to do with the production of goods and services.

5 0
3 years ago
A retail company sells products such as agricultural produce and consumer products. The company procures materials from farmers
mojhsa [17]

Answer:

Inbound logistics

Explanation:

Inbound logistics is the process of obtaining raw materials, and other goods and services, to the firm, while outbound logistics is the process of delivering the final goods and services from the firm to the customers.

In this case, the retail company is engaging in inbound logistics because it is procuring the raw materials from local farmers. Once these materials reach the firm, it can transform them into the agricultural produce and consumer produce that it sells.

5 0
4 years ago
bob katz and sally mander are a married couple with four children. total wages for 2018 equaled $102,400. stock which had been p
xxTIMURxx [149]

Answer:

Bob Katz and Sally Mander

Taxable Income for 2018:

= $78,200

Explanation:

a) Data and Calculations:

Total wages =                  $102,400

Gain from sale of stock =     5,200

Interest income =                      100

Total income =                 $107,700

less total deductions =     (29,500)

Taxable Income =            $78,200

b) Bob Katz and Sally Mander will have taxable income of $78,200 when the appropriate rate of tax is applied and the tax liability obtained, then the $1,500 tax credit will be deducted before arriving at the tax liability due.  

c) The short-term capital gain of $5,200 is taxed as ordinary income.  Since it is held for less than a year, it will be included in the taxable income for that year and it follows the same tax brackets as ordinary income.  On the other hand, the long-term capital gain of  $13,000 will attract a tax rate of 0 percent for a taxable income of $78,200.  Otherwise, it will attract a tax rate of 15 percent or 20 percent, depending on income level. This means that long-term capital gains tax rates are much lower than the ordinary income tax rate.

8 0
4 years ago
Other questions:
  • What are the five main columns of a journal?
    9·1 answer
  • After widespread press reports about the dangers of contracting "mad cow disease" by consuming beef from Canada, the likely econ
    10·2 answers
  • The multiplier effect occurs when an initial increase (or decrease) in autonomous expenditure produces a greater increase (or de
    15·1 answer
  • Compute the Cost of Goods Manufactured and Cost of Goods Sold for Blue Sea Company for the most recent year using the amounts de
    14·1 answer
  • Pluralistic ignorance efffect. How to apply in business administration? Give example
    15·1 answer
  • A ________ decision is best explained by the following: When a company’s finance department decides to go to the organizations u
    11·1 answer
  • A country finds itself in the following situation: the government budget surplus is 2% of its GDP; private savings is 30% of GDP
    15·1 answer
  • Dennis Kozlowski, John Thain, and Raj Rajaratnam are former CEOs mentioned in the text that have been involved in corporate gove
    7·1 answer
  • Describe a pricing decision your company has made. was it optimal? if not, why not? how would you adjust price? compute the prof
    15·1 answer
  • An employer hiring in a competitve labor market should hire additional labor as lnog as?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!