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
zimovet [89]
3 years ago
6

What would be your future account value (after-tax and after-inflation) if you invested $125 each month into a growth mutual fun

d for 20 years? Assume an average annual rate of return of 12.5 percent. Assume a combined federal and state income tax of 24% and an average inflation rate of 3.8% over the 20-year period.
Business
1 answer:
Burka [1]3 years ago
6 0

Answer:

future value is $4353.89

Explanation:

given data

invested = $125 each month

time = 20 year

rate of return = 12.5 %

federal and state income tax = 24% = 0.24

inflation rate = 3.8% = 0.038

to find out

future value (after-tax and after-inflation)

solution

first we find here real rate of return by given formula that is

1+ real rate of return = \frac{1 + nominal return rate}{1+inflation rate}   ...................1

so here nominal return rate is = 12.5% ( 1 - 24% ) = 9.5% = 0.095

so

1+ real rate of return = \frac{1 +0.095}{1+0.038}

real rate of return = 0.05491

so real rate of return is 5.49%

so

future value formula is express as

future value = investment * \frac{(1+r)^{n} -1}{r}     ............2

put here value

future value = 125 * \frac{(1+0.0549)^{20} -1}{0.0549}

future value = 4353.89

so future value is $4353.89

You might be interested in
Tyson Foods is the largest U.S. beef and chicken​ supplier, processing more than​ 100,000 head of cattle and​ 40-plus million ch
Deffense [45]

Answer:

$810,000

Explanation:

The computation is shown below:

The increase in fixed cost is

= Salary of each sales representative × number of sales representatives hired

=  $45,000 × 18

= $810,000

Now the increase in sales needed for break even is

= Increase in fixed cost ÷ Contribution margin ratio

= $810,000 ÷ 30%

= $2,700,000

As we know that break even sales is computed by dividing the fixed cost by the contribution margin ratio and we applied the same

5 0
3 years ago
A production function: shows the output that is most highly valued by consumers. shows the most desired production method for a
BigorU [14]

Answer:

Shows the output that is produced using different combinations of inputs combined with existing technology

Explanation:

The production function is an <u>expression that links the different amount of inptuts used in the production process and the final output obtained with each combination of inputs, with a given tehcnology.</u>

As an example, if a economy produces only popcorn, a production function would be an expression that shows hou much popcorn that economy can produce with different combinations of corn and sugar, with a given technology.

4 0
3 years ago
With a(n) _______, the full amount of the loan is received when the contract is signed, but only the interest is paid over the l
Vikentia [17]

Answer: Balloon Loan

A balloon loan is a type of loan where the final payment is usually much larger than the payment preceding it.  

In a balloon loan, the entire loan amount is given to the borrower as soon as the loan is approved and the contract is signed.

The interest falls due and is paid during the life of the loan.  

The principal however, is paid as a balloon payment on the final day of the life of the loan.


6 0
3 years ago
The simple annual interest rate on a loan is 5%. what is the interest due on a loan of $3,500 after one year
zlopas [31]
The formula is
I=prt
I interest due ?
P principle 3500
R interest rate 0.05
T time 1 year
I=3,500×0.05×1
I=175
3 0
3 years ago
Read 2 more answers
Why do buissness complete an a free enterprise system ?​
Kitty [74]
Here u go this is really helpful I just had this question yw

3 0
3 years ago
Other questions:
  • Suppose that real GDP is currently ​$13.55 trillion and potential real GDP is​ $14.0 trillion, or a gap of ​$500500 billion. The
    14·1 answer
  • A decrease in the basis will __________ a long hedger and __________ a short hedger. Group of answer choices hurt; hurt hurt; be
    15·1 answer
  • Assume a $170,000 investment and the following cash flows for two products: Year Product X Product Y 1 $ 40,000 $ 60,000 2 60,00
    14·1 answer
  • Executives at Southwestern Construction have noticed that the company's construction team in the Phoenix office is more efficien
    11·1 answer
  • Last year Martha could grow 20 bushels of basil or 25 bushels of cilantro on each acre of land that she farmed. This spring, she
    9·1 answer
  • In a push based system of distribution which relies on selling to customers through a sales force and retail partners, managers
    10·1 answer
  • 225,000 cartons of machine screws per year to support its manufacturing needs over the next seven years, and you've decided to b
    5·1 answer
  • A year ago, Kim Altman purchased 160 shares of BLK, Inc. for $20.50 on margin. At that time the margin requirement was 40 percen
    11·1 answer
  • Which of the following job search materials is the most important?
    15·2 answers
  • The organization of data within folders in a manual file system is determined by?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!