Answer:
- <u>The rate of return is 8.15%</u>
- <u>This is a good investment</u>
<u></u>
Explanation:
For the first question, you need to find the rate that makes the present value of a stream of ten constant annual payments of $15,000 equal to the $100,000 investment.
The formula that returns the present value of a constant payment is called the annuity formula and is:
![Present\text{ }value=payment\times \bigg[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}\bigg]](https://tex.z-dn.net/?f=Present%5Ctext%7B%20%7Dvalue%3Dpayment%5Ctimes%20%5Cbigg%5B%5Cdfrac%7B1%7D%7Br%7D-%5Cdfrac%7B1%7D%7Br%281%2Br%29%5Et%7D%5Cbigg%5D)
In your problem you know:
- Present value: $100,000
- payment: $15,000
- r: ?
- t: 10
You cannot solve for r directly. You must guess a value and calculate the right side of the equation until to you find the rate that makes it equal to 100,000.
Try 5%:
![\$15,000\times \bigg[\dfrac{1}{0.05}-\dfrac{1}{0.05(1+0.05)^{10}}\bigg]=\$115,826](https://tex.z-dn.net/?f=%5C%2415%2C000%5Ctimes%20%5Cbigg%5B%5Cdfrac%7B1%7D%7B0.05%7D-%5Cdfrac%7B1%7D%7B0.05%281%2B0.05%29%5E%7B10%7D%7D%5Cbigg%5D%3D%5C%24115%2C826)
Then, the rate of return is greater than 5%. After several trials you will find that the rate of return is 8.15%.
Since this rate is higher than 8%, which is what the company requires, this is a good investment.
Answer:
C
Step-by-step explanation:
I did the math
Substitute x for whatever number is on the graph for x then do the math and get the answer for y and see if they are correct for each one.
Answer:
x = 0, y = 7
Step-by-step explanation:
Solving a system of equations using substitution requires one side to be equal to a variable present in the equation, in this case x or y. We should simplify the equation using elimination before substituting to reduce the chance of error.
In order to use the elimination method, you have to create variables that have the same coefficient—then you can eliminate them. These equations arew already aligned for us.
3x - 10y=-70
-<u> 4x +9y = 63</u>
-x + y = 7
Now, for substitution, the equation must be set to a variable.
-x + y = 7
y = x + 7
Next, plug the equation in where applicable in another equation.
4x +9(x + 7) = 63
4x + 9x + 63 = 63
13x = 0
x = 0
The final step of substitution is to plug the known variable into an equation to find the other variable.
3(0) - 10y=-70
0 - 10y = -70
10y = 70
y = 7
I guarantee you this answer is correct, I worked it out using other methods and graphing prior to submitting this answer.
Answer:
$64.13
Step-by-step explanation:
the tip would be added to the meal cost
