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Marrrta [24]
3 years ago
12

A man aged 40 wishes to accumulate a fund for retirement by depositing $1,000 at the beginning of each year for 25 years. Strati

ng at age 65, he will make 15 annual withdrawls at the beginning of each year. Assuming that all payments are certain to be made, find the amount of each withdrawal starting at age 65 if the annual percentage rate (compunded annually) is 4% during the first 25 years but only 3.5% thereafter.
Business
1 answer:
Firdavs [7]3 years ago
7 0

Answer:

The man will made 15 drawins for 31,468 at their retirement age.

Explanation:

We solve for the future value of the annuity-due (deposits at the beginning)

C \times \frac{(1+r)^{time} -1}{rate}(1+r) = FV\\

C 1,000.00

time      25

rate         0.04

1000 \times \frac{(1+0.04)^{-25} -1}{0.04}(1+0.04) = PV\\

FV $375.1168

Now, we calcualte the amount of the withdrawals considering the new rate:

PV \div \frac{1-(1+r)^{-time} }{rate}(1+r) = C\\

375.116802253964 \div \frac{1-(1+0.035)^{-15} }{0.035}(1+0.035) = C\\

C  $ 31.468

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A competitive firm has been selling its output for $20 per unit and has been maximizing its profit, which is positive. Then, the
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Mayfair Co. completed the following transactions and uses a perpetual inventory system in June.
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Answer:

Journal Entries

Explanation:

The Journal entry is shown below:-

June 4

Accounts receivable Dr,           $650

         To Sales                                    $550

(Being sale of merchandise on credit is recorded)

June 4

Cost of goods sold Dr,               $400

          To Merchandise inventory       $400

(Being cost of goods sold is recorded)

June 5

Cash Dr,                                    $6,693

Credit card expenses               $207

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(Being sale of merchandise is recorded)

June 5

Cost of goods sold Dr,               $4,200

          To Merchandise inventory       $4,200

(Being cost of goods sold is recorded)

June 6

Accounts receivable - access Dr,  $5,733

Credit card expenses Dr,                $117

($5,850 × 2%)

                 To Sales                             $5,850

June 6

Cost of goods sold Dr,               $3,800

          To Merchandise inventory       $3,800

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June 8

Accounts receivable - access Dr,  $4,263

Credit card expenses Dr,                $87

($4,350 × 2%)

                 To Sales                             $4,350

(Being sale of merchandise on credit is recorded)

June 8

Cost of goods sold Dr,               $2,900

          To Merchandise inventory       $2,900

(Being cost of goods sold is recorded)

June 13

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June 18

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(Being payment for the purchase is recorded)

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