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Degger [83]
3 years ago
9

You just received a $5,000 gift from your grandmother. You have decided to save this money so that you can gift it to your grand

children 50 years from now. How much additional money will you have to gift to your grandchildren if you can earn an average of 7.5 percent instead of just 7 percent on your savings?
Business
1 answer:
Sphinxa [80]3 years ago
8 0

Answer:

$38,663.61

Explanation:

Given:

Principle amount = $5,000

Duration, n = 50 years

Now,

With interest rate 7.5%

Future value = Principle × ( 1 + r )ⁿ

thus,

Future value = $5,000 × ( 1 + 0.075 )⁵⁰

or

Future value = $185,948.73

With interest rate 7%

Future value = Principle × ( 1 + r )ⁿ

thus,

Future value = $5,000 × ( 1 + 0.07 )⁵⁰

or

Future value = $147285.12

Hence,

The additional amount to be gifted = $147285.12 - $185,948.73

= $38,663.61

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Firlakuza [10]

Answer: The answer is $1,092,865.5426

To the nearest whole dollar, we have:

$1,092,866

Explanation: from the question above, we will be calculating the present value of a cashflow of $93,000 over a period of 20 years, at a rate of 5.76%.

We will be performing a discounting operation.

Refer to the attached files below to see the calculations and how we arrived at the answer above.

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3 years ago
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Answer:

Samuel plays the role of a securities broker.

Explanation:

A securities broker has the function of being the link between the investor and the global financial markets. The broker helps guide the client to make the best investment decisions in the market.

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<em>I hope this information can help you.</em>

8 0
3 years ago
AB Builders, Inc., has 22-year bonds outstanding with a par value of $2,000 and a quoted price of 106.657. The bonds pay interes
Aloiza [94]

Answer:

7.32%

Explanation:

<em>The price of a bond is the present of its interest payment and the present value of redemption value (RV</em>

Present value of the Redemption Value (RV) =

FV× (1+r/2)^(-2×n)

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=2000× (1.0337)^(-2×22)

= 465.233

Present Value of the coupon payment =Price of bond - PV of RV

                          = (106.657% × 2000) - 465.233

                         =    $1667.90

PV of coupon payment= A × (1-(1+r)^(-2×n)

A- semiannual coupon payment, r -yield

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A = 1,667.90/22.7710

A= 73.246

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Annual coupon rate = coupon payment/ face value

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                                = 7.32%

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2 years ago
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These illustrations highlight the influence of competitive elements as a component of the external environment.

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<h3>What does external competition entail?</h3>

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<h3>Which elements influence the competitive environment?</h3>

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