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Harrizon [31]
3 years ago
10

Mark Johnson saves a fixed percentage of his salary at the end of each year. This year he saved $2,500. For each of the next 5 y

ears, he expects his salary to increase at an 10% annual rate, and he plans to increase his savings at the same 10% rate. There will be a total of 6 investments, the initial $2,500 plus five more. If the investments earn a return of 13% per year, how much will Mark have at the end of six years
Business
2 answers:
yarga [219]3 years ago
7 0

Answer:

Mark will have at the end of six years the amount of $25,865.74

Explanation:

According to the given data we have the following:

First investment = 2500

Investment increasing at rate of 10%

Interest rate = 13%

t=6 years

Present value is given by formula = C * [((1+g)^n/(1+i)^n) - 1 ] / (g-i)

C is first value = 2,500

g is increase in investment = 0.10

i is intrest rate = 0.13

n is no of years = 6

Putting values into the equation

P = 2500* [((1+ 0.10)^6/(1+0.13)^6) - 1 ] / (0.10-0.13)  1.771561    2.08195

P = 2500* [((1.10)^6/(1.13)^6) - 1 ] / (-0.03)

P = 2500* [0.8509142870866 - 1 ] / (-0.03)

P = 2500* (-0.14908571)/ (-0.03)

P = 2500* 4.9695236

P=$12,423.809

Future value = P*(1+i)^t

= $12,423.809 *(1+0.13)^6

= $25,865.74

Mark will have at the end of six years the amount of $25,865.74

Artist 52 [7]3 years ago
3 0

Answer:

$29,228.47

Explanation:

year            savings                investment               total

<u>                                                returns                                      </u>

1                  $2,500                (1 + 13%)⁶                  $5,204.88

2                 $2,750                (1 + 13%)⁵                   $5,066.70

3                 $3,025                (1 + 13%)⁴                   $4,932.18

4                 $3,327.50           (1 + 13%)³                   $4,801.24

5                 $3,660.25          (1 + 13%)²                    $4,673.77

<u>6                 $4,026.28           (1 + 13%)                    $4,549.70 </u>

total           $19,289.03                                          $29,228.47

Since Mark earns compound interest, then the returns will be:

  • 1.13⁶ = 2.082
  • 1.13⁵ = 1.8424
  • 1.13⁴ = 1.6305
  • 1.13³ = 1.443
  • 1.13² = 1.2769
  • 1.13¹ = 1.13

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vodomira [7]

Answer:

Less than half of fraud cases.

Explanation: Fraud is the intentional use of false or misleading information in an attempt to illegally deprive another person or entity of money, property, or legal rights. In order to constitute fraud, the party making the false statement must know or believe that it is untrue or incorrect and intended to deceive the other party.

5 0
3 years ago
CII, Inc., invests $630,000 in a project expected to earn a 12% annual rate of return. The earnings will be reinvested in the pr
Gelneren [198K]

Answer:

$1,956,684

Explanation:

As the project has a expected annual return, we have to calculate future value of this investment to find how much money Cll, Inc. will have after 10 years to reinvest.

We know,

FV = PV × (1 + i)^{n}

Given,

Present Value, PV = $630,000

Annual rate of return, i = 12% = 0.12

Number of period, n = 10 years

Putting the value into the above formula, we can get,

FV = $630,000 × (1 + 0.12)^{10}

FV = $630,000 × 3.105848

FV = $1,956,684

$1,956,684 can be reinvested after the liquidation of 10 years.

8 0
3 years ago
A recession tends to cause the federal budget deficit to ________ because tax revenues ________ and government spending on trans
AveGali [126]

Answer:

b) increase; fall; rises

Explanation:

Federal budget comes from tax revenues and was drained by transfer payments.

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3 0
3 years ago
The variance of a sample of 121 observations equals 441. The standard deviation of the sample equals 1.91. 231. 21. 11.
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The standard deviation of sample equals: 11

Explanation:

Given:

                                 variance of sample (S^{2}) = 121

                                 no, of observations made = 441

                                         standard deviation = ?

By using the formula:

                          Standard deviation (S) = \sqrt{variance}

                                                                 = \sqrt{S}

                                                                 = \sqrt{121}

                                                                 = 11

Hence the standard deviation is equal to 11.

 

6 0
3 years ago
The following information pertains to Crane Company. 1. Cash balance per bank, July 31, $11,136. 2. July bank service charge not
Alexus [3.1K]

Answer:

1. Adjusted cash balance per bank $13,760

Adjusted cash balance per books $13,760

2. Jul-31

Dr Cash $2,560

Cr Notes Receivable $2,560

Jul-31

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Cr Cash $64

Explanation:

1. Preparation of a Bank reconciliation statement

at July 31, 2022

CRANE COMPANY

Bank Reconciliation

July 31,2022

Cash balance per bank statement $11,136

Add: Deposits in transit $4,544

Less: Outstanding checks ($1,920)

Adjusted cash balance per bank $13,760

Cash balance per books $11,264

Add: Electronic Funds transfer Received $2,560

Less: Bank service charge ($64)

Adjusted cash balance per books $13,760

2. Preparation of the adjusting journal entries at July 31 on the books of Crane Company.

Jul-31

Dr Cash $2,560

Cr Notes Receivable $2,560

Jul-31

Dr Miscellaneous Expense $64

Cr Cash $64

7 0
2 years ago
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