Answer:
False. If interest rates are positive, the future value will always be more than the present value.
Explanation:
Future value is given by:
FV = PV
wherein, FV= Future Value
PV= Present Value
i = rate of interest per period
n = number of periods
So, if interest rates are positive, the current investment shall be compounded to arrive at Future value which would turn out to be more than the present value.
For example, $ 100 invested today at 10% per annum, after an year would yield $110. This represents future value.
In case future value is provided as 110$ and rate of interest is given as 10% per annum, such future value discounted at 10% would give $100 today which represents the present value.
Thus, Future value will always be more than the present value if interest rates are positive.
Answer:
Explanation:
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Answer:
with the new rate we will pay in 58 months.
if there is 2% commision charge: 59.35 = 60 months
Explanation:
Currently we owe 10,000
This will be transfer to a new credit card with a rate of 6.2%
We are going to do monthly payment of 200 dollars each month
and we need to know the time it will take to pay the loan:
We use the formula for ordinary annuity and solve for time:
C $200.00
time n
rate 0.005166667 (6.2% rate divide into 12 months)
PV $10,000.0000
We arrenge the formula and solve as muhc as we can:
Now, we use logarithmics properties to solve for time:
-57.99227477 = 58 months
part B
If there is a charge of 2% then Principal = 10,000 x 102% = 10,200
we use that in the formula and solve:
-59.34880001 = 59.35 months
Answer: $730.2
Explanation:
Let the total cost of cleaning clothes = X
Other variables include:
Total cost of boxes = $6×120
=$720
Ordering cost =$3
Holding costs = (10/100 ×6)12
=$7.2
Total costs of cleaning clothes =
The cost of boxes+ordering cost+holding cost
=720+3+7.2 = $730.2
Answer:
3.52 years
Explanation:
In the payback, we analyze in how many years the invested amount is recovered. The computation is shown below:
In year 0 = $1,100
In year 1 = $300
In year 2 = $310
In year 3 = $320
In year 4 = $330
In year 5 = $340
If we sum the first 3 year cash inflows than it would be $930
Now we deduct the $930 from the $1,100 , so the amount would be $170 as if we added the fourth year cash inflow so the total amount exceed to the initial investment. So, we deduct it
And, the next year cash inflow is $320
So, the payback period equal to
= 3 years + ($170 ÷ $330)
= 3.52 years
In 3.52 years, the invested amount is recovered.