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
RUDIKE [14]
2 years ago
10

Today, you deposit $2,500 of cash in a savings account that earns 8.0% in annualized interest. One interest payment is received

at the end of every year. You make no other deposits or withdrawals.
In five years, the amount of interest on interest you have earned in your savings account is closest to: ________

a. $173
b. $175
c. $177
d. $1,000
e. $1,177
Business
1 answer:
Artemon [7]2 years ago
3 0

Answer:

a. $173

Explanation:

The computation of the amount of interest earned in five years is shown below;

But before that following calculations need to be done

As we know that

Simple interest = Present value × rate of interest × time period

= $2,500 × 8% × 5

= $1,000

Now the future value is

Future value = Present value × (1 + rate of interest)^number of years

= $2,500 ×(1 + 8%)^5

= $2,500 × 1.4693280768

= $3,673

Now the compound interest is

Compound interest = Future value - Present value

= $3,673 - $2,500

= $1,173

Now interest on interest is

Interest on interest = Compound interest - Simple interest

= $1,173 - $1,000

= $173

You might be interested in
Which of the following terms refers to a promise made to lenders by a borrower?
Natali5045456 [20]

Answer:

Covenant.

Explanation:

A covenant in business context refers to a formal debt agreement between a lender and a company that specific actions will or will not be undertaken.

4 0
3 years ago
You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for exac
allsm [11]

Answer:

PV= $620,921.32

Explanation:

Giving the following information:

Cash flow (Cf)= $100,000

Interest rate (i)= 7.25%

<u>First, we need to calculate the value of the investment at the moment of the first payment (five years from now). </u>To calculate the present value we need to use the following formula:

PV= Cf / i

PV= 100,000 / 0.1

PV= $1,000,000

<u>Now, the value today:</u>

PV= FV / (1 + i)^n

PV= 1,000,000 / (1.1^5)

PV= $620,921.32

8 0
2 years ago
1.What is MONEY?<br>2.did MONEY help you?<br>pls ans im back​
REY [17]
1. Money is a very valuable thing that helps you live. You can get money by getting a job, but there are lots of other ways to get money.

2. money helps with you being able to afford things. Money can get you a house, a tv, or even a phone.
5 0
3 years ago
Two​ firms, A and B​, must each choose either a low price or a high price for their product. The payoff matrix shows the profit
ahrayia [7]

Answer: 1. A.Both firms will choose the low price.

2. B. Both firms would choose the high price.

Explanation:

1. If the firms cannot cooperate with each other and must choose simultaneously, both firms will choose the low price.

This is because at the low price both of them are at the highest profit they can make when they are not cooperating. For instance, if Firm B chooses Low Price and Firm A chooses High Price, Firm A will make $3 million while Firm be will make $8 million.

If Firm B decides to have a high price then firm A will take the low price and make $8 million in profit while Firm B makes $4 million. If they are not working together, they will both have to take the low price to make the most profit.

2. If the firms could cooperate with each​ other, both firms would choose the high price.

The is because they will be making more than competing and getting a lower profit. Should they cooperate they will each get $7 million in profit because they will pick the option they can both make the highest profit at. The is better than competing and making only $5 and $6 million respectively.

If you need any clarification do comment. Cheers.

4 0
2 years ago
Find the principal P that must be invested at rate r, compounded monthly, so that $1,000,000 will be available for retirement in
astraxan [27]

Answer:

$224,174

Explanation:

Note : I have uploaded the full question below :

The Principle P that is required can be calculated from the given data though discounting future cash flows as follows :

FV = $1,000,000

r = 7½%

t = 20 × 12 = 240

P/yr = 12

Pmt = $0

PV = ?

Using a Financial Calculator to input the values as shown above, the PV would be $224,174 . Thus, the principal P that must be invested must be $224,174.

6 0
2 years ago
Other questions:
  • Compare and contrast the risks and goals of entrepreneurs and inventors.
    6·2 answers
  • Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that
    12·1 answer
  • American airlines traded eight 747s for twelve dc-10s owned by united airlines. this transaction is an example of
    13·1 answer
  • A factory currently manufactures and sells 800 boats per year. Each boat costs $5,000 to produce. $4,000 of the per-boat costs a
    5·1 answer
  • Immediately after a hurricane, it is likely that the quantity demanded for tree cutting/removal services will ______ the quantit
    13·1 answer
  • The human resource (HR) department of Wardund, an event management company, sent emails to all the employees of the firm, inviti
    14·1 answer
  • Abbot Corporation reported a net operating loss of $440,000 in 20X3, which the corporation elected to carryforward to 20X4. Incl
    11·1 answer
  • Outdoor fitness posted $1.2 million in sales on account in December. Which division of the accounting department is responsible
    6·2 answers
  • Velocity, a consulting firm, enters into a contract to help Burger Boy, a fast-food restaurant, design a marketing strategy to c
    11·1 answer
  • When the publisher of the well-known berenstain bears books wanted to celebrate the 50th anniversary of the series, it initiated
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!