All categories

3 years ago

What is the present discounted value of $10,000 that is to be received in 2 years if the market rate of interest is 4 percent?

Business

1 answer:

ddd [48]3 years ago

7 0

Answer:

PV = $9,245.56

Explanation:

Giving the following information:

Future value (FV)= $10,000

Number of periods (n)= 2 years

Discount rate (i)= 4% = 0.04

To calculate the present value (PV), we need to use the following formula:

PV = FV / (1 + i)^n

PV = 10,000 / (1.04^2)

PV = $9,245.56

You might be interested in

At the beginning of a recent year, JetBlue's assets were $6,549 million and its equity was $1,546 million. During the year, asse

Simora [160]

Answer:

Thus, the JetBlue's equity at the end of the year is $1,654 million

Explanation:

In this case, the accounting equation is used.

Accounting equation means the equation which shows double accounting entry system. Double accounting means debit side and credit side. In this accounting equation, the total assets is equal to total liabilities + total equity.

Total Assets = Total Liabilities + Total Equity

$6549 = Total Liabilities + $1,546

Total Liabilities = $5,003 million

In the question the assets is increased by $44 million whereas liabilities is decreased by $64 million.

So,

Updated asset value = $6,549+$44

= $6,593 million

Updated liabilities value = $5,003 - $64

= $4,939 million

So, the ending equity value will be

= Ending assets - Ending liabilities

= $6,593 million - $4,939 million

= $1,654 million

Thus, the JetBlue's equity at the end of the year is $1,654 million

7 0

3 years ago

A metallurgical engineer decides to set aside money for his newborn daughter's college education. He estimates that her needs wi

erastova [34]

Answer:

what should be the size of each deposit, if the account earns interest at a rate of 8% per year?

$2477,81

Explanation:

% N Monthly % VF

1,08 0 2477,81117 1,00 2.477,81

1,08 1 2477,81117 1,08 2.676,04

1,08 2 2477,81117 1,17 2.890,12

1,08 3 2477,81117 1,26 3.121,33

1,08 4 2477,81117 1,36 3.371,03

1,08 5 2477,81117 1,47 3.640,72

1,08 6 2477,81117 1,59 3.931,97

1,08 7 2477,81117 1,71 4.246,53

1,08 8 2477,81117 1,85 4.586,26

1,08 9 2477,81117 2,0 4.953,16

1,08 10 2477,81117 2,16 5.349,41

1,08 11 2477,81117 2,33 5.777,36

1,08 12 2477,81117 2,52 6.239,55

1,08 13 2477,81117 2,72 6.738,71

-20.000,00

4 0

3 years ago

Wright Company's cash account shows a $29,300 debit balance and its bank statement shows $27,600 on deposit at the close of busi

IgorLugansk [536]

Answer:

Bank Reconciliation Statement:

Calculation of Adjusted cash Balance on 31 May:

Cash Balance: $ 29,300

less: Bank Charges $ (190)

less: NSF Check $ (420)

Adjusted cash Book Balance $ 28,690

Add: Outstanding Checks $ 6,500

Less: Uncleared Checks $ 7,100

Revised Cash Book Balance (A) $ 28,090

Bank Statement Balance $ 27,600

Add: Error by Bank $ 490

Adjusted Bank Balance (B) $ 28,090

Explanation:

Bank reconciliation is a company document prepared in order to reconcile difference between balance as per cash book and balance as per bank statement.

The difference arise because of two reasons:

Timing differences (Outstanding checks and Uncleared checks
Error and Omissions. (Bank charges -NSF)

6 0

3 years ago

Banks pay their customers interest on the money in their accounts for what reason? A. That money earns interest when the bank lo

Bezzdna [24]

Answer:

A. That money earns interest when the bank loans it out.

Explanation:

Banks pay their customers interest on the money in their accounts because that money earns interest when the bank loans it out.

4 0

3 years ago

5. A manufacturing company decides to buy solar cells in anticipation of rising electricity costs. The company is modeling its p

ch4aika [34]

If the expected rate of return for the company equals 8%, the maximum amount of initial investment that makes this a desirable and profitable project is $11,385.20.

<h3>What is the present value?</h3>

The present value is the discounted value of some future cash flows. It is computed using the present value formula or table. It can also be computed using an online finance calculator as follows:

For this project, we first calculate the future value of the cost-savings from the solar project based on $20,000 and 5% increases for 20 years as follows.

N (# of periods) = 20 years

I/Y (Interest per year) = 5%

PV (Present Value) = $20,000

PMT (Periodic Payment) = $0

Results:

FV = $53,065.95 ($20,000 + $33,065.95)

Total Interest = $33,065.95

Thereafter, we compute the present value of the above future value based on an 8% expected rate of return as follows:

N (# of periods) = 20 years

I/Y (Interest per year) = 8%

PMT (Periodic Payment) = $0

FV (Future Value) = $53,065.95

Results:

PV = $11,385.20

Total Interest = $41,680.75

Thus, if the expected rate of return for the company equals 8%, the maximum amount of initial investment that makes this a desirable and profitable project is $11,385.20.

Learn more about future values at brainly.com/question/24703884

8 0

2 years ago