Question 3 of 20

Investments and loans base their interest calculations on one of two possible methods: the interest and the interest methods. Bo

IrinaK [193]

FV = PV Times (1 + r)^n
FV = PV + (PV Times r Times n)
False
False
True
Laura should invest in investment P

Investment = L FV = $66,485.49 Make this investment? No

Investment = M FV = $59,400 Make this investment? No

Investment = P FV = $77,318.37 Make this investment? Yes

Explanation:

Compound interest: FV = PV Times (1 + r)^n
Simple interest: FV = PV + (PV Times r Times n)
The process of earning compound interest allows a depositor or investor to earn interest on any interest earned in prior periods. False
After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. False
All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year. True

Investment = L

Interest rate and method = 5% compound interest

Expected Future Value, FV = PV (1 + r)^n

FV = 45000 (1 + 0.05)^8

FV = 45000 * (1.05)^8

FV = 45000 * 1.477455 = $66,485.49

Make this investment? Yes / No

Investment = M

Interest rate and method = 4% simple interest

Expected Future Value, FV = PV + (PV * r * n)

FV = 45000 + (45000 * 0.04 * 8)

FV = 45000 + 14400 = $59,400

Make this investment? Yes / No

Investment = P

Interest rate and method = 7% compound interest

Expected Future Value, FV = PV (1 + r)^n

FV = 45000 (1 + 0.07)^8

FV = 45000 * (1.07)^8

FV = 45000 * 1.718186 = $77,318.37

Make this investment? Yes / No

Since she can only make one investment during the eight-year investment period, Laura should invest in investment P

8 0

3 years ago

Dawn's credit card has an APR of 15%, calculated on the previous monthly

vladimir1956 [14]

Explanation:

It can be tempting to pay the minimum amount due on your credit card bill, but it can be really expensive in the long run. Here's what happens if you only pay the minimum on your credit card.

4 0

3 years ago

On the first day of the fiscal year, a company issues an $949,000, 9%, five-year bond that pays semiannual interest of $42,705 (

KonstantinChe [14]

Answer:

Bond issue price $892,100

Face value $949,000

Discount on bond $56,900

Number of Interest payments (10 years x 2) 10

Discount to be amortized per payment $5,690

Interest on bond $51,210

Date Description Debit Credit

Dec. 31 Bond interest expense $56,900

Discount on bonds payable $5,690

Cash $51,210

(Interest on bond paid and Premium amortized)

7 0

3 years ago

A perfectly elastic demand curve implies that the firm: A) must lower price to sell more output. B) can sell as much output as i

dsp73

Answer:

A perfectly elastic demand curve means that the firm can sell as much output as it chooses at the current price.

Explanation:

The perfectly elastic demand implies that the demand curve is horizontal line parallel to the X axis. The price is fixed at a point and the firm can sell any amount of output at this point. The demand is infinite at the given price level. If the firm makes any changes in this price level, the demand will become zero.

4 0

3 years ago

When materials, information, and services gain value as they move from the raw-materials supplier to the end customer, they a

Gennadij [26K]

Answer:

When materials, information, and services gain value as they move from the raw-materials supplier to the end customer, they are said to be moving through ________.

A. the supply chain

B. a value-added analysis

C. business process re-engineering

D. Total Quality Management (TQM)

E. just-in-time production

Answer: A

Explanation:

A supply chain is a system between an organization and its providers to create and appropriate a particular item to the last purchaser. This system incorporates various exercises, individuals, elements, data, and assets. The supply chain additionally speaks to the means it takes to get the item or administration from its unique state to the client. Organizations create supply chains so they can diminish their expenses and stay serious in the business scene. Supply chain the board is a pivotal procedure on the grounds that an enhanced supply chain brings about lower costs and a quicker creation cycle. A supply chain includes a progression of steps required to get an item or administration to the client. The means incorporate moving and changing crude materials into completed items, shipping those items, and conveying them to the end-client. The substances associated with the supply chain incorporate makers, merchants, stockrooms, transportation organizations, appropriation focuses, and retailers.

8 0

3 years ago