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Rom4ik [11]
3 years ago
10

After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exc

eed the future value based on simple interest.
a. True
b. False

The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods.
a. True
b. False
Business
1 answer:
kari74 [83]3 years ago
3 0

Answer: 1. False

2. True

Explanation:

1. Compound Interest allows an investor to earn money on the interest that has already accrued to the investment instead of just on the original investment like Simple interest. For this reason, the future value of compound interest will always be larger than simple interest for the simple reason that Compound interest is being charged on an amount larger than the amount being used for Simpler interest.

2. The process of compound interest does indeed allow a depositor/ investor to earn interest on any interest earned in prior periods. For instance, if the interest rate on a $500 saving is 10% per annum and it is using Compound interest, in the first year the interest earned will be,

= 10% * 500

= $50

In the second year the interest earned will be,

= 10% * 500 + the previous year interest

= 10% * 550

= $55

Notice how the interest has increased.

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The answer is Market Research .
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I am conducting a survey as a project. I need ur help Which one you like 1. Ferrari 2. Lamborghini 3. Mclaren and why?? ( If you
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Answer:

Explanation:

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3 years ago
Based on the readings: match the following business example with its associated product cost term A businessowner pays for rent
sladkih [1.3K]

Answer:

A business owner pays for rent and equipment at their office ⇒ FIXED COSTs since the amount of rent paid should be the same year after year

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8 0
2 years ago
osie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation:
neonofarm [45]

Answer:

The Bad Debt expense will be in year 1;

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The Bad Debt Expense         $45,000*1%=$450

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6 0
3 years ago
You wish to retire in 20 years, at which time you want to have accumulated enough money to receive an annual annuity of $24,000
den301095 [7]

Answer:

$3,286.52

Explanation:

Interest rate per annum = 12.00%

Number of years = 25

Number of compounding per per annum = 1

Interest rate per period (r) = 12.00%

Number of periods (n) = 25

Payment per period (P) = $24,000

PV of $24,000 payments after 20 years = P * [1 - (1/(1+r)^n)]/ r

PV of $24,000 payments after 20 years = 24000*[1-(1/(1+12%)^25]/12%

PV of $24,000 payments after 20 years = $188,235.34

Interest rate per annum = 10.00%

Number of years= 20

Number of payments per per annum = 1

Interest rate per period (r) = 10.00%

Number of periods (n) = 20

Future value of annuity (FVA) = $188,235

Annual contribution (P) = FVA/ ([ (1+r)^n - 1] / r)

Annual contribution (P) = 188235/(((1+10%)^20-1)/10%)

Annual contribution (P) = $3,286.52

5 0
2 years ago
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