The following information is from the records of Mountainview Camera Shop: Accounts receivable, December 31, 2018 $80,000 (d
1 answer:
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Answer:
$1,667.67
Explanation:
Given:
Balance in savings account at the beginning of the year = $2,000
Price level at the beginning of the year = 100
Price level at the end of the year = 120
Anything that is worth $120 in the beginning of the year is worth $100 at the end of the year.
Anything worth $1 in the beginning is worth 100/120 at the end.
So, $2,000 is worth = $1,667.67 at the end of the year.
Real value of savings is close to $1,667.67.
Answer:
Ans. The annuity that will be equivalent to the publisher´s advance would be $26.40 per year, for 9 years at 7% interest rate.
Explanation:
Hi, first, let´s bring that $500 to be paid in 9 years to present value, we need to use the following formula.
Where: r is our discount rate (7%) and n the periods from now when she will receive that $500 amount. This should look like this.
Ok, so the equivalent amount of money today of those $500 in nine years is $271.97, but the author wants $100 today so the remaining amount has to be used to find the equal annual payments to be made in order to be equivalent to re remaining balance ($171.97). We now need to use the following equation.
And we solve for "A" like this
Therefore, the equivalent amount of money of $500 in 9 years is $100 today and $26.40 every year, at the end of the year, for nine years.
Best of luck.