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Andrei [34K]
2 years ago
9

3. Assume you can earn 9% per year on your investments. a. If you invest $100,000 for retirement at age 30, how much will you ha

ve 35 years later for retirement? (Answer: $2,041,397) b. If you wait until age 40 to invest the $100,000, how much will you have 25 years later for retirement? (Answer: $862,308) c. Why is the difference so large?
Business
1 answer:
Crank2 years ago
6 0

Answer:

Results are below.

Explanation:

Giving the following information:

Interest rate= 9%

<u>To calculate the future value, we need to use the following formula:</u>

FV= PV*(1+i)^n

a)

PV= $100,000

n= 35

i= 0.09

FV= 100,000*(1.09^35)

FV= $2,041,396.79

b)

PV= $100,000

n= 25

i= 0.09

FV= 100,000*(1.09^25)

FV= $862,308.07

There is a big difference between investing at 30 than at 40. It is due to the compounding interest of the first 10 years.

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Blossom Corp. will pay dividends of $5.00, $6.25, $4.75, and $3.00 in the next four years. Thereafter, management expects the di
Shkiper50 [21]

Answer:

Present value = $35.00326585 rounded off to $35.00

Explanation:

Using the dividend discount model, we calculate the price of the stock today. It values the stock based on the present value of the expected future dividends from the stock. To calculate the present value of the stock, we will use the following formula,

Present value = D1 / (1+r)  +  D2 / (1+r)^2  +  ...  +  Dn / (1+r)^n  +

[(Dn * (1+g)  /  (r - g))  /  (1+r)^n]

Where,

  • r is the required rate of return
  • g is the constant growth rate in dividends
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Present value = 5 / (1+0.155)  +  6.25 / (1+0.155)^2  + 4.75 / (1+0.155)^3  +  

3 / (1+0.155)^4  +  [(3 * (1+0.07)  /  (0.155 - 0.07))  /   (1+0.155)^4]

Present value = $35.00326585 rounded off to $35.00

3 0
3 years ago
Which of the following best represents the pricing behavior of firms in a monopolistically competitive industry?
allochka39001 [22]

Answer:

The correct answer is option B.

Explanation:

A monopolistic firm is characterized by a large number of buyers and sellers in the market producing differentiated products which are close substitutes, there are relatively easier entry and exit in the market.  

In the given question, Teen Angle Hardware is looking for a niche or a slightly differentiated product to sell to teenagers. But is able to earn only a normal profit because there is a large number of firms in the market. And new firms can enter the market in the long run. So, this firm is an example of a monopolistic firm.  

3 0
2 years ago
The liquidity approach to measuring money defines the M2 money supply as A. near monies. B. currency plus travelers checks and c
tatiyna

Answer:

The correct answer is C. M1 plus near monies.

Explanation:

The liquidity approach emphasizes the role of money as a store of value and downplays the role it plays as a means of payment. To assess the amount of money emphasizes that the essentially distinctive property of money is that it is the most liquid of assets.

The strict money supply or circulating medium (M1), which defines money as the money in the hands of the public and demand deposits (DV) is the usual most accepted formula as money. Therefore, money in the strict sense is listed as such in the monetary statistics of the International Monetary Fund (IMF) and many other financial institutions around the world.

7 0
3 years ago
At Afterbadge, a chain of stores that sells computer accessories, all the marketing activities are planned at the company headqu
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Answer:

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8 0
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Answer:

The insurer shall be held liable

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For any published or displayed content which relates to the insurer or it's products, the insurer shall be made liable for any inappropriate content.

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5 0
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