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pashok25 [27]
3 years ago
9

Interest rate​ (with changing​ years). Keiko is looking at the following investment choices and wants to know what annual rate o

f return each choice produces. a. Invest ​$420.00 and receive ​$769.05 in 12 years. b. Invest ​$3 comma 000.00 and receive ​$11 comma 567.45 in 14 years. c. Invest ​$32 comma 303.47 and receive ​$110 comma 000.00 in 20 years. d. Invest ​$32 comma 275.63 and receive ​$1 comma 100 comma 000.00 in 40 years. a. What annual rate of return will Keiko earn if she invests ​$420.00 today and receives ​$769.05 in 12 ​years? nothing​% ​ (Round to two decimal​ places.)
Business
1 answer:
Ivenika [448]3 years ago
4 0

Answer:

a. 5.18%;

b. 10.12%;

c. 6.32%;

d. 9.22%.

Explanation:

We apply the formula of Annual rate of return to calculate for the four cases.

The formula for calculating annual rate of return as below:

Annual rate of return = \sqrt[year]{Ending value/Beginning value} -1 ;

So, for each of the case given, by applying the formula, the detailed calculations for each case will be:

+ For case a :

\sqrt[12]{769.5/420} -1 = 5.18%;

+ For case b:

\sqrt[14]{11,567.45/3,000} -1 = 10.12%;

+ For case c:

\sqrt[20]{110,000/32,303.47} -1 = 6.32%;

+ For case d:

\sqrt[40]{1,100,000/32,275.63} -1 = 9.22%.

You might be interested in
Kasey Corp. has a bond outstanding with a coupon rate of 5.86 percent and semiannual payments. The bond has a yield to maturity
BaLLatris [955]

Answer:

Market price = $2,464.21

Explanation:

coupon rate = 5.86% / 2 = 2.93%

YTM = 4.3% / 2 = 2.15%

face value = $2,000

periods to maturity = 24 x 2 = 48

Present value of face value = $2,000 / (1 + 2.15%)⁴⁸ = $720.42

Present value of coupon payments = $58.60 x {[1 - 1/(1 + 0.0215)⁴⁸ ] / 0.0215} = $1,743.79

Market price = $2,464.21

3 0
3 years ago
What percent of rich people are self made in the USA?
GaryK [48]
In 2012,70%of rich people were self made in the USA.That is the updated answer in 2012.
6 0
3 years ago
A dometic firm may decide to contract for the production of its goods by established foreign manufacturer. Such pricate-label ma
Monica [59]

Answer:

Contract manufacturing.

Explanation:

A domestic firm may decide to contract for the production of its goods by established foreign manufacturer. Such private-label manufacturing by a foreign company is called contract manufacturing.

Contract manufacturing involves the process of outsourcing a company's manufacturing business, such that a foreign company engages in the production of a private-label product which are then primarily marketed or distributed by a domestic company under its own brand name.

This ultimately implies that, it is a manufacturing process which involves the production of goods by a company under the brand name of another company.

8 0
2 years ago
On March 15, a fire destroyed Blossom Company's entire retail inventory. The inventory on hand as of January 1 totaled $5300000.
Svet_ta [14]

Answer:

The value of inventory destroyed=$4,082,000

Explanation:

<em>The value of the inventory destroyed is the difference between the the cost of the total goods available for sale and the cost of goods sold</em>

The value of inventory destroyed = cost of goods available for sale - value of inventory sold

Cost of goods sold = 3540,000 - (20%×  3540,000)= 2,832,000

The cost of goods available for dale = opening inventory + purchases + freight charges

$5300000 + $1432000 +  $182000 = 6,914,000

The value of inventory destroyed = 6,914,000 - 2,832,000 = 4082000

The value of inventory destroyed=$4,082,000

7 0
2 years ago
A proposed project has an initial cost of $38,000 and cash inflows of $12,300, $24,200, and $16,100 for years 1 through 3, respe
In-s [12.5K]

Answer:

IRR is greater than required return by 17.38 - 16.8 % = 0.58 %

so project will accept

Explanation:

given data

initial cost = $38,000

cash inflows year 1 =  $12,300

cash inflows year 2= $24,200

cash inflows year 3 = $16,100

rate of return = 16.8 %

solution

we consider here IRR is = x so

present value of inflows is equal to present value of outflows   .............1

we can say that it as

initial cost = present value

3800 = \frac{12300}{1*x} +\frac{24200}{(1*x)^2} +\frac{16100}{(1*x)^3}

solve it we get

x = 17.38%

here IRR is greater than required return by 17.38 - 16.8 % = 0.58 %

so project will accept

4 0
3 years ago
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