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uysha [10]
3 years ago
13

Franklin Templeton has just invested $8,860 for his son (age one). This money will be used for his son’s education 18 years from

now. He calculates that he will need $57,908 by the time the boy goes to school. What rate of return will Mr. Templeton need in order to achieve this goal? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Business
1 answer:
luda_lava [24]3 years ago
8 0

Answer:

Future value (FV) = $57,908

Present value (PV) = $8,860

Number of years (n) = 18 years

Interest rate = ?

FV = PV(1 + r)n

$57,908 = $8,860(1 + r)18

$57,908 = $8,860(1 + r)18

<u>$57,908</u> = (1 + r)18

$8,860

6.535891648 = (1 + r)18

18√6.535891648 = 1 + r  

1.10993 - 1 = r

r = 0.10992 = 10.99%

Explanation:

In this case, we will apply the future value of a lump sum (single investment) formula. The present value, future value and number of years are given with the exception of interest rate. Thus, interest rate is made the subject of the formula.

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3 years ago
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The table shows that price of J will be $12, the quantity demanded of A will be 700, and the marginal revenue of E is 7.

<h3>How to calculate the values?</h3>

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Consider two companies in a world with no taxes that are alike except in borrowing choices. Company 1 has no debt​ financing, an
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Answer:

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Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one cup of coffee, one donut,
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Answer:

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