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MatroZZZ [7]
3 years ago
7

Inflation is 3% per year, what does it mean to place money in your savings account today with interest rates that are .5%

Business
1 answer:
alexira [117]3 years ago
6 0

Answer:

It means that your money will lose value as you will earn less interest than the grow in the inflation rate.  

Explanation:

The inflation is the change on the prices of goods and services from a market basket as they become more expensive year by year. The Inflation rate of 3% suggest that the prices in the economy will increase a 3% at the end of the year while the interest on the money you have deposited in your bank account will gain only 0.5% at the end of the year.

Then the prices of good and services will growth faster than the growth in your savings. This situation makes that you lose purchase power with your money and therefore it will not be intelligent to keep the money in that savings account. The best thing to do is to search for another investment such a Term Deposit or Stocks.  

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If you borrow $25,000 from a local finance company and you are required to pay $4,424.50 per year for 10 years, what is the annu
djyliett [7]

Use this formula:

A= P(1+rt),

A is the final investment amount (4424.50x10)

P is the principal amount (25,000)

r is the rate of interest (annual)

t is the time period (10)

If A= P(1+rt),

then (1+rt) = A/P.

(1+r(10)=( 44,245)/25,000

10r=1.7698-1

r=.7698/10

<span>r=.07698 or 7.698%</span>

3 0
3 years ago
Additional Information: Net income for 2020 was $26,890. Land was sold for cash at a loss of $2,000. Cash dividends were paid du
slega [8]

Answer:

The question is wrong ,find attached correct question:

The correct option in the attached is $58290 ,option E,which is missing in the original question

Explanation:

Cash flow from operating activities=net income+depreciation charge-increase in accounts receivable+decrease in inventory+decrease in prepaid expenses-decrease in accounts payable+loss on sale of land-gain on sale of equipment

cash flow from operating activities=$26,890+($135,000-$92,000)-($77,000-$64,000)+($140,000-$132,000)+($16,540-$12,140)-($45,000-$33,000)+$2000-$1000=$58290

Download xlsx
5 0
3 years ago
Which dimension of e-commerce technology describes the fact that the internet is available at work, at home, and elsewhere via d
Vikentia [17]

Ubiquity is the dimension of e-commerce technology describes the fact that the internet is available at work, at home, and elsewhere via desktop and mobile services.

The definition of technology is the application of scientific knowledge to practical purposes or applications. Technology takes scientific principles and applies them to transform the environment in which we live. Technology can also use scientific principles to advance industry and other human constructs.

Technology is the way scientific knowledge is applied to practical purposes. It includes not only machines (such as computers), but also technologies and processes (such as how computer chips are made). All technology may seem electronic only, but that's just the latest technology.

Learn more about technology here:brainly.com/question/25110079
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5 0
2 years ago
In the securitization process, mortgages are pooled together and cash flows are packaged into securities to be sold in the secon
Lemur [1.5K]

Answer: Option (C)

Explanation:

Mortgage-backed security is referred to as an investment which is quite similar to the bond that is formed from the accumulation of home loan which are bought from several commercial banks. The investors indulged in the Mortgage Based Security tend to earn a periodic payment which are similar to the bond coupon. These securities are often referred to as the conduits.

3 0
3 years ago
The Digital Electronic Quotation System (DEQS) Corporation pays no cash dividends currently and is not expected to for the next
malfutka [58]

Answer:

a) $94.88

b)  in 1 year, the intrinsic price of the stocks should increase to $109.11

Explanation:

year                      dividend              EPS

0                              0                       $10

1                               0                       $12

2                              0                       $14.40

3                              0                       $17.28

4                              0                       $20.736

5                              0                       $24.8832

6                              $11.45               $28.61568

growth rate up to year 5 = 20%

ROE growth rate starting year 6 = 15%

dividend growth rate starting year 6 = 15% x (1 - 40%) = 9%

cost of equity = 15%

horizon value at year 5 = $11.45 / (15% - 9%) = $190.83

current intrinsic value per stock = $190.83 / 1.15⁵ = $94.88

intrinsic price in 1 year = $190.83 / 1.15⁴ = $109.11

8 0
4 years ago
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