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lesantik [10]
3 years ago
15

Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $5

0,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today?a. $574,924b. $605,183c. $635,442d. $667,214e. $700,575
Business
1 answer:
liraira [26]3 years ago
8 0

Answer:

The answer is 605,183.

Explanation:

The aunt has to calculate how much money will cost an annuity of 50,000 for 30 years, at one rate of 7.25%, and she wants to star at the end od the first year. The formula we need is C * (1-(1+i)^{-t} )/i, where C is the annuity, i is the rate, and t is the amount of years of the annuity., So, the calculation is 50,000 * (1-(1,0725)^{-30} )/0,0725 = 50,000 * 12,1036627 = 605,183.

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A. The only way to calculate the sales revenue needed to achieve a target profit is by using the formula provided in class

Explanation:

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3 years ago
Amazon stock prices gave a realized return of 6​%, negative 6​%, 9​%, and negative 9​% over four successive quarters. What is th
Anvisha [2.4K]

Answer:

-1.167%

Explanation:

The current value of the stock is given by applying all of the realized returns to the initial purchase price. Let 'A' be the initial price, the price at the end of the year is:

P = A*(1+0.06)*(1+0.09)*(1-0.06)*(1-0.09)\\P=0.9883A

At the end of the year, the stock had a price of 0.9883 times the initial price, the annual realizes return was:

r=(0.9883 - 1)*100\%\\r= -1.167\%

Annual realized return was  -1.167%.

8 0
2 years ago
On a pay stub, what is the difference between "Net Pay" and YTD Net Pay"?
Len [333]
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4 0
3 years ago
Which of the following statements regarding perpetuities is​ FALSE? A. A perpetuity is a stream of equal cash flows that occurs
Xelga [282]

Answer:

The answer is: C) PV of a perpetuity​ = StartFraction r Over Upper C EndFraction (I guess this means PV = r / C, which is FALSE)

Explanation:

The formula for calculating the present value of a perpetuity is:

                        PV = C / r

Where PV = Present Value, C = cash flow, r = discount rate.

A perpetuity is a stream of equal cash flows that lasts forever (perpetually).

The formula for calculating the present value of a perpetuity is simple, so there is no reason to spend time calculating the present value of each cash flow, since there are infinite cash flows.

A consol bond s a type of perpetuity issued by the British government (also by the US government)

7 0
3 years ago
The corporate charter of Llama Co. authorized the issuance of 14 million, $1 par common shares. During 2021, its first year of o
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Answer:

Llama Co.

The amount that Llama should report as Additional Paid -in Capital in its December 31, 2021 balance sheet is:

= $36 million.

Explanation:

a) Data and Analysis:

Authorized capital, 14 million at $1 par common shares

January 1: Issued 5 million at $19 per share:

Debit Cash $95 million

Credit Common Stock $5 million

Credit Paid-in Capital in Excess of Par-Common $90 million

June 3: Purchased 6 million shares of treasury stock at $33 per share:

Debit Treasury Stock $6 million

Debit Paid-in Capital in Excess of Par-Common $192 million

Credit Cash $198 million

December 28: Sold the 6 million shares of treasury stock at $24 per share:

Debit Cash $144 million

Credit Treasury Stock $6 million

Credit Paid-in Capital in Excess of Par-Common $138 million

Summary of Paid-in Capital in Excess of Par-Common Account:

January 1: Cash   $90 million (Credit)

June 3: Cash       (192 million) (Debit)

Dec. 28: Cash      138 million (Credit)

Dec. 31: Balance $36 million (Credit)

3 0
3 years ago
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