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
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.

You might be interested in
The entry to record the issuance of a note receivable is ______. Multiple choice question. debit Notes Receivable and credit Cas
nlexa [21]

The entry to record the issuance of a note receivable is debit Notes Receivable and credit Cash.

<h3>What is Note Receivable ?</h3>

A note receivable is an asset account tied to an underlying promissory note, which details in writing the payment terms for a purchase between a “payee” (typically a company, and sometimes called a creditor) and the “maker” of the note (usually a customer or employee, and sometimes called a debtor).

The journal entry for interest on a note receivable is to debit the interest income account and credit the cash account.

Notes receivable are a balance sheet item that records the value of promissory notes that a business is owed and should receive payment for. A written promissory note gives the holder, or bearer, the right to receive the amount outlined in the legal agreement.

Learn more about  Note Receivable on:

brainly.com/question/13781634

#SPJ4

5 0
2 years ago
f a price floor of $15 is imposed on this market and the government chooses to purchase the surplus, the government must buy ___
zlopas [31]

If a price floor of $15 is imposed on this market and the government chooses to purchase the surplus, the government must buy <u>10</u> units of the good and spend a total amount of <u>$150</u> on its purchase.

<u>Explanation</u>:

According to the given figure, a surplus of the good will result if the price is $15. The government has a total amount of $150. If it decides to spend the total amount on purchasing, the government should buy 10 units of goods.

As the price of each good is $15 and the total amount with the government is $150.

On calculating with the given information,

150/15= 10

So the government can buy 10 units of goods for the total amount of $150.

8 0
3 years ago
The LIBOR scandal in 2012 involved a. banks reporting inflated earnings from their loans. b. hackers breaking into the loan docu
stepladder [879]

Answer:

C) banks falsely reporting the interest rates they offered in the interbank market.

Explanation:

The LIBOR rate is used all over the world to set banking interest rates. it reflects the cost of interbank loans. The LIBOR was used as a benchmark to charge interest rates to clients around the world, e.g. LIBOR + 2%.

The scandal involved many major banks, e.g. Deutsche Bank, Barclays, UBS, Rabobank, HSBC, Bank of America, Citigroup, JPMorgan Chase, the Bank of Tokyo Mitsubishi, Credit Suisse, Lloyds, WestLB, Royal Bank of Scotland, and a long list of etc.

What the banks did was artificially manipulate the LIBOR rate by increasing or decreasing it to show artificial profits from trading activities. When the manipulation was discovered, it had been going on for at least 7 years, and some believe it started earlier.

4 0
2 years ago
I toss a penny and observe whether it lands heads up or tails up. Suppose the penny is fair, i.e., the probability of
Alexandra [31]

Answer:

A) if I flip the coin many, many times, the proportion of heads will be approximately 1/2, and this proportion will tend to

get closer and closer to 1/2 as the number of tosses increases.

Explanation:

Probability is described as the likelihood of an event happening. It is expressed in numerical fractions between zero and one. Zero means near certainty that the event will not occur while one is a guarantee that the event is happening.

A probability of 1/2 signifies a 50 percent chance. In a coin toss, 1/2 probability means the coins have 50 chance of landing on either tail or head. A coin has only two sides. Each ill toss presents a head or tail. The more tosses one makes, the proposition of heads to tail get closer 1/2. Very many tosses will give show 1/2 to either tails or head.

7 0
3 years ago
A company has a beginning owner’s capital of $100,000. It has net loss for the current year of $50,000 and paid $10,000 in divid
11111nata11111 [884]

Answer:

The ending owner’s capital for the company is $40,000

Explanation:

For computing the ending owner capital, the following equation should be used which is shown below:

Ending owner capital = Beginning owner capital - net loss - dividend paid to shareholders

= $100,000 -- $50,000 - $10,000

= $40,000

The net loss and dividend decrease the owner equity which ultimately decreases the capital. So, we deduct these amounts.

Hence, the ending owner’s capital for the company is $40,000

5 0
3 years ago
Other questions:
  • Who is responsible for payment of self-employment tax on fees received by a professional fiduciary?
    9·1 answer
  • The study on male crickets showed a trade-off between ______.
    15·1 answer
  • Midwest Agri-Products Corporation offers to sell its sugar substitute to Nice Candies, Inc., only if Nice Candies agrees to buy
    5·1 answer
  • Even though eggs are a significant source of cholesterol, what other information on the nutrition label should tom consider if h
    9·1 answer
  • Waterway Industries began the year with retained earnings of $316000. During the year, the company issued $421000 of common stoc
    15·1 answer
  • WACC.  
    15·1 answer
  • All of the following are true regarding annuities, except: A They are similar to life insurance B They are designed to protect a
    9·1 answer
  • A firm has actual sales in November of $1,000 and projected sales in December and January of $3,000 and $4,000, respectively. Th
    10·1 answer
  • Which of the following statements is true regarding competition?. . A) Competition among buyers decreases sellers' profits.. . C
    5·2 answers
  • Websites not only give us information, but they also inspire designers in their layouts, illustrations, images, typefaces, and c
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!