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Rama09 [41]
3 years ago
11

You want to purchase a new car in 7 years and expect the car to cost ​$77 comma 000. Your bank offers a plan with a guaranteed A

PR of 5.5 % if you make regular monthly deposits. How much should you deposit each month to end up with ​$77 comma 000 in 7 ​years?
Business
1 answer:
Flauer [41]3 years ago
7 0

Answer: $753.58

Explanation: The best way to calculate this is by using a financial calculator. An HP10bII+ is an appropriate financial calculator to use, although other financial calculators should still compute the same answer.

By using a financial calculator to find the answer the following elements are required:

Present Value (PV): the value of money currently that will grow into more money in the future. Because you still have to start saving money to deposit into the bank from the first month, your present value is still $0.

Interest rate (I/YR): the amount, in percentage terms, charged by the bank to you on the value of the money you deposited into the bank. This allows your deposit to grow on a month to month basis. In this case the bank charges an APR of 5.5%.

Number of years (N): the amount of years the money will stay in the bank before it matures. The value will grow over the next 7 years.

Future Value (FV): This is the final amount of a current investment after it has grown in an account that accrues interest over time. In this case it is the expected $77,000 at the end of the 7th year.

All the above elements are computed to find the payment per month (PMT). This is the amount of money you have to deposit into the account every month to receive a total future value of $77,000 after 7 years.

When these figures are inputed into a calculator the following outcome is deduced:

Ensure 12 periods per year (12 shift P/YR on calculator), as deposits are made every month for 12 months every year.

PV = 0

I/YR = 5.5%

N= 84 periods (i.e. 7 years x 12 months per year)

FV = $77.000

∴ PMT = $753.5766 rounded to $753.58 (ignore the minus sign, this only indicates that you are taking money out to deposit into the account monthly)

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ames Corporation is planning to issue bonds with a face value of $501,500 and a coupon rate of 6 percent. The bonds mature in 10
Yuliya22 [10]

Answer:

The independent cases not given in the question are:

a. Case A: Market interest rate (annual): 4 percent.  

b. Case B: Market interest rate (annual): 6 percent.  

c. Case C: Market interest rate (annual): 8.5 percent.

At 4% issue price is  $583,502.44

At 6% issue price is $501,500.00

At 8% issue price is $433,344.51

Explanation:

The price of the bond can be computed using the pv value formula in excel.

=pv(rate,nper,pmt,fv)

rate is the market interest given in the three cases divided by since the bond is a semi-annual interest paying bond. for example 4%/2=2%

nper is the time to maturity multiplied by 2  i.e 10*2=20

pmt is the coupon  interest receivable by investor semi-annually which is 6%/2*$501,500=$15045

fv is the face value at $501,500

at 4%

=pv(2%,20,15045,501500)

=$583,502.44

at 6%

=pv(3%,20,15045,501500)

=$501,500.00

At 8%

=pv(4%,20,15045,501500)

=$433,344.51

8 0
3 years ago
The PR team at GoodJuice writes an article on how well-prepared artificial fruit juices can help individuals lose weight. They b
laila [671]

Answer:

Native.

Explanation:

In this context, it can be said that GoodJuice is using a type of native advertising.

In this advertising strategy, the advertiser's objective is to win the attention of consumers through content that adds some kind of value, that generates engagement and interest. This is a type of paid ad that combines the content and function of the media on which it is served.

One of the examples of native advertising are the recommended content on a web page.

5 0
2 years ago
Which of the following selections effectively use the "you" view.
-Dominant- [34]

Answer:

  • B. Thank you for your letter regarding your CRB2 home entertainment center.
  • D. You are invited to take advantage of our professional development workshops.

Explanation:

The ''you'' view refers to a style of writing where the sender intends to make sure that the focus is on the person receiving the correspondence.

By using the ''you'' view, the receiver becomes the subject of the correspondence such that the text and its contents and are directed at the receiver.

The correct options would be B and D because the options were directed strictly to the receiver and no one else.

4 0
3 years ago
In 2019, Felicity's business use of her vehicle fell to less than 50%. Regular MACRS depreciation had been used in prior years.
Flauer [41]

Answer:

(d) Straight-line method (SL), the same convention as used in the first year of depreciation, ADS recovery period

Explanation:

The straight line method is the best to use, the convention to be used is the same as what was used in the first year of depreciation and the recovery period in 2019 is the ADS recovery period.

To decrease annual deduction, it is standardized that ADL is used with straight line method with 31 plus years for a recovery period that is longer.

5 0
2 years ago
Which is true of output-choice models of oligopoly behavior?
brilliants [131]
B SHOULD BE THE CORRECT
8 0
3 years ago
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