1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sidana [21]
3 years ago
12

You can invest in an account that pays simple interest or an account that pays compound interest. In either case, you plan to in

vest $2,600 today and both accounts have an annual interest rate of 5 percent. How much more interest will you receive in the 8th year in the account that pays compound interest?
Business
1 answer:
trasher [3.6K]3 years ago
8 0

Answer:

You will receive $201.38 more interest if the investment is made with a compound interest rate rather than a simple interest rate.

Explanation:

<u>Simple interest rate</u>

We can calculate how much interests you'd obtain if you deposited the $2,600 in a simple interest rate account.

We start using the following formula for calculating the simple interests:

I=P * r

Where:

<em>I</em> are the interests per year,

<em>P</em> is the amount being invested,

<em>r</em> is the interest rate.

Replacing in the formula with the given values we have:

I=2600*0.05=130

We then proceed to multiply this result by the <em>given number of years</em>, which is 8. We get 130*8=1040.

Finishing with the <em>simple interest rate</em>, if we wanted to know how much is the investment worth at the end of a 8 year period, we must merely add <em>the principal</em> (the $2,600) to the total interests after the end of the period ($1040). So 2600+1040= 3640.

We'll use these results later.

<u>Compound interest rate</u>

The formula for compound interests is the following:

I=P(1+r)^n

Where:

<em>I</em> is the value of the investment after <em>n</em> years,

<em>P</em> is the principal amount being invested,

<em>r</em> is the interest rate,

<em>n</em> are the number of years the investment is compounded.

Replacing in the formula with the given values we have:

I=2600*(1+0.05)^8=3841.38

After the 8 year period, the investor will have $3841.38 in it's compounded interest account.

<u>Comparing these results</u>

<u></u>

We can simply substract the value of both investments at the end of a 8 year period, to determine how much more interest does the compound interest rate account give in relation to a simple interest rate account.

The values we've gotten were:

$3,640 for the simple interest rate account, and

$3,841.38 for the compounded interest rate account.

3841.38-3640=201.38. Therefore the answer is: the account that pays compounded interests will pay $201.38 more to this invididual, compared to an account that pays simple interest.

You might be interested in
in the past several decades, many companies have made effective use of flexible accumulation—the strategy used by transnational
tester [92]

Answer:

It has more than 7,000 factories overseas that manufacture products for the company.

Explanation:

7 0
1 year ago
of the following will help you avoid the legal perils of electronic communications? Check all that apply. Make messages specific
maksim [4K]

Answer:

1. Make messages specific.

2. Abide by all copyright laws

3. Keep conversations casual but professional.

Explanation:

In the business environment, care should be taken when exchanging electronic communication. This is because, electronic messages can be intercepted and unfavorable findings, used to launch legal proceedings.  Some things to do to avoid the legal perils of electronic communication, include;

1. Be specific: Electronic communications do not have to beat around the bush. Rather, they should be specific and straight to the point. Ideas must be communicated as accurately as possible. Employers must also be specific about their policies on electronic communication.

2. Abide by all copyright laws: When using electronic or printed materials from other sources, credit must be given to the owners of such materials to avoid lawsuits or accusations of piracy.

3. Keep conversations casual but professional: While, thoughts have to be communicated freely, they should however, not be overly casual. Professionalism must be maintained.

Care should be taken to avoid deleting messages unnecessarily as they may be requested for retrieval to validate accusations. Also, a rule of thumb is not to write messages when we can just talk to the person.

5 0
3 years ago
Colin is 40 years old and wants to retire in 27 years. His family has a history of living well into their 90s. Therefore, he est
NARA [144]

Answer:

$2.1 million

Explanation:

Colin will retire at 67 and expects to live 28 more years. Be believes that he will need approximately $112,500 (in current dollars) per year to live while he is retired. His social security benefits are $30,000 + $20,000 in a government sponsored annuity (in current dollars) per year, so that means that he needs to cover the remaining $62,500. In order to calculate this, I will assume that Colin receives his first distribution on his 67th birthday (annuity due) and each distribution is made on an annual basis and received on the subsequent birthdays until he turns 94 (28th distribution).  

The $62,500 that Jordan expects to need once he retires must be adjusted to inflation (3%). In 27 years they will equal $62,500 x (1 + 3%)²⁷ = $138,830.56

Using an excel spreadsheet, I calculated the present value of Colin's 28 distributions using an 8% discount rate = $2,064,637.04 , which we can round up to $2.1 million

Colin currently has $200,000 in his retirement account and in 27 years (age 67), his account will be worth $200,000 x (1 + 8%)²⁷ = $1,597,612.29

this means that Colin will be $2,064,637.04 - $1,597,612.29  = $467,024.75 short

using the future value of an annuity formula, we can calculate the annual contribution:

annual contribution = future value / annuity factor

  • future value = $467,024.75
  • FV annuity factor, 8%, 27 periods = 87.35077

annual contribution = $467,024.75 / 87.35077 = $5,346.54

3 0
3 years ago
Martha signs a listing agreement with Broker Patrick. Which of the following would probably not be found in the agreement they s
andriy [413]

Answer:

. Martha's average utilities

Explanation:

As it is mentioned in the information Martha has signed the listing agreement, a listing agreement is an agreement which is signed between the broker and owner.

The significance of listing contract is that the owner allowing the broker to work for the owner as an agent to sell the property.  so it must include broker commission, Martha's property price and duration of the contract

3 0
3 years ago
An accountant who blows the whistle on financial wrongdoing by his/her employer by going outside the entity violates:
Harman [31]

Confidentiality

What is Confidentiality?

When it comes to sensitive information, confidentiality refers to the idea and practice of keeping it secret until the owner or data custodian explicitly consents to sharing it with another party. Another definition of confidentiality is the request to uphold the rule and custom.

Owners and custodians of sensitive data create policies defining the categories of information that require protection in order to preserve confidentiality. On the basis of it, they specify a number of procedures for the environments, tools, and people engaged in data handling and storage. These include educating and training staff members and the clients they serve, investing in and maintaining the buildings, equipment, and software where data resides and travels, tracking the movements of sensitive data, and planning and implementing data loss prevention (DLP).

Learn more about Confidentiality with the help of given link:-

brainly.com/question/16853444

#SPJ4

5 0
1 year ago
Other questions:
  • Which of the following is a good question to ask during an informational interview?
    11·2 answers
  • What data are collected from consumers to develop a perceptual map for a particular product category?
    8·1 answer
  • You earn a salary of $52,000 per year and get paid biweekly. Calculate
    7·1 answer
  • The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead ra
    9·1 answer
  • Suppose that real GDP equals $10 trillion, nominal GDP equals $20 trillion, and the aggregate price level equals 2.
    15·1 answer
  • The load rating limit can be exceeed in which of the following circumstances?
    12·1 answer
  • There is a connection between the content of an advertisement and the characteristics of the media used to carry the message. Th
    15·1 answer
  • Who do you like better?? BTS or BlackPink???
    11·1 answer
  • 1. Max purchased a used car for $3400. He paid 62 % sales tax. How much tax did he pay?​
    10·1 answer
  • Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will income equal if sales are $325
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!