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Natali5045456 [20]
3 years ago
5

Liam is considering putting money in an investment plan that will pay him $52,000 in 12 years. If Liam's opportunity cost rate i

s 7 percent compounded annually, what is the maximum amount he should be willing to pay for the investment today?
Business
1 answer:
ASHA 777 [7]3 years ago
6 0

Answer:

$23,088.62

Explanation:

We must determine the present value of Liam's investment discounted by his opportunity cost rate. The present value formula is:

PV = FV / (1 + r)ⁿ

  • FV = $52,000
  • r = 7%
  • n = 12

PV = $52,000 / (1 + 7%)¹² = $52,000 / 2.2522

PV = $23,088.62

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Answer:

6.25%

Explanation:

The formula for calculating interest rate is as follows

I= P x R x T

Where

I= interest,  P= principal amount, T is time

in this case: I= $60.94, P=$975, T=1 year

Therefore:

$60.94 = $975 x( r/100) x 1

$60.94 =975(r/100) multiply both side by 100 to get rid of the fraction.

6094=975r

r = 6094/ 975

r = 6.2502

interest rate = 6.25%

8 0
3 years ago
Why might a person assume the Mr. White could be doing well financially
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\huge\color{purple}{\mathbb{ANSWER:}}

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4 0
3 years ago
Porter’s competitive strategies of cost leadership and differentiation focus on ____ markets, while the cost-focus and focused-d
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Answer:

WIDE

NARROW

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Explanation:

Porter’s competitive strategies of cost leadership and differentiation focus on WIDE markets, while the cost-focus and focused-differentiation strategies focus on NARROW markets.

Differentiation refers to a firm's ability to create a good or service that is distinct from other product. This strategy leads to having or creating brand image, which allows the organization to sell its products or services at a premium

Cost leadership relates to a firm's ability to create economies of scale by producing a large volume of goods or service.

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3 years ago
Markets can:
solong [7]

Answer:

D

Explanation:

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