Entertainer's Aid plans five annual colossal concerts, each in a different nation's capital. The concerts will raise funds for a
1 answer:
Answer: $5,569,758.43
Explanation:
First you need to find the present value of the Perpetuity at the end of the fifth year.
Present value of Perpetuity = Amount / Interest rate
= 3,000,000 / 9%
= $33,333,333.33
Given an interest rate of 9%, Entertainer's aid should deposit an amount per year that would lead to the endowment having $33,333,333.33 at the end of the fifth year.
Future value of annuity = Annuity * Future value of annuity interest factor, 9%, 5 years
33,333,333.33 = Annuity * 5.9847
Annuity = 33,333,333.33 / 5.9847
= $5,569,758.43
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The Interest rate is the rate that is charged by the lender for the use of his money.
The percent of the total amount paid by Charles would be the on the interest of 16.70%.
<h3>What is the interest rate?</h3>The interest rate is the amount of interest that is due per period, as a quotient of the amount deposited, or borrowed.
The amount of interest depends upon the sum of the principal, and it can vary by the amount of money lent or deposited.
<u>Computation </u><u>of the </u><u>rate </u><u>of </u><u>interest</u><u>:</u>
Given,
List Price = $21,450,
Interest Rate on the finance plan = 12.28%,
Monthly Interest rate:
Sales Tax Rate = 6.88%
Registration and documentation fee = $1,213 ($1,089 +$124)
Then,
The amount after-tax on selling neon 2004 is:
Then the total amount paid for a new car is:
And, The total amount gets from the finance plan:
so, Present Value = $17,753
Now, apply the given values in the formula of annuity, we get the monthly payment:
Where A = Annuity
Then, The total repayment in Charles finance plan would be:
The total interest expenses would be:
Therefore, the percentage of total interest expenses in the amount paid is :
Hence, The rate of interest would be 16.70%.
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