Answer:
Equal annual contributions to the college savings account over the next 18 years is : $4,745.6
Explanation:
Suppose the time the child was born is the Beginning of Year 0 (Y0). So, 18 equal contributions need to be made at the beginning of each year from Y0 to Year 17. Denote these cash flow as Annuity 1 which equal: ( C/ 2%) x ( 1.02^18 -1) = 21.4123 x C with C is the equal annual contribution
The tuition fee starting from the beginning of Year 18 end at the Beginning of Year 21 is a growing annuity at 2.5% growth rate. The Value of this annuity ( Annuity 2) discounted to the Beginning of Year 17 calculated as followed:
(28,000 / (2% - 2.5% ) x ( 1 - [( 1+2.5%)/(1+2%)]^4 ) = $110,614
To save enough for college fee, The future value of Annuity 2 must equal the present value of Annuity 2 calculated above.
Thus, we have: 21.4123 x C = 110,614 <=> C = $4,745.6
Always agreeing with anyone above you
Not accepting ideas
Lack of communication, up and down and across
Keeping information inaccessible
Not understanding your customers
Staff don't participate in any decisions
No team work, everyone out for themselves
Little chance of advancement
No reward system
Not following their own policies
Inconsistency in products or service
Maybe that's enough, huh?
Answer:
there are no options, but the journal entry should be:
Dr Cash 2,500
Dr Investment in bonds 350
Cr interest revenue 2,850
Explanation:
Since the bonds' carrying value is less than the face value, it means that Gardner Company purchased them at a discount. When the bonds were purchased, the investment in bonds account's balance was not $100,000 (the par value), instead it was recorded at the lower amount at which they were purchased. As coupon payments are received, the discount on the bonds is amortized and their carrying value should increase until it reaches par value on maturity date.
Answer:
A. Barb will earn $7.5 more interest in the next year than Andy
Explanation:
Compound interest applies on the reinvested interest amount.
Solution:
Andy's earning:
F= Future Value , P = Present Value, i = Interest rate, n=Years
Using = F = P(1+i)∧ n
First Year:
F = $3,000(1 + 0.05)∧1
= $3,150
Interest Earning:
$3,150 - $3,000 = $150
Second Year
F = $3,000(1 + 0.05)∧1
= $3,150
Interest Earning:
$3,150 - $3,000 = $150
Interest Earning Total = $150 + $150 = $300
Barb's Earnings:
For First year,
F = $3,000(1+0.05)∧ 1
= $3,150
Interest Earning:
$3,150 - $3000 = $150
For Second year,
F = $3,150(1.05)∧ 1
= $3,307.5
Interest Earning:
$3,307.5 - $3150 = $157.5
Interest Earning Total = $150 + $157.5 = $307.5
Barb's Earnings - Andy's Earnings = $307.5 - $300 = $7.5
P1 = $27
P0 = $23
To solve:
Capital gain rate = (P1 - P0)/P0
Capital gain rate = ($27.00 - $23.00)/$23.00
Capital gain rate = $4/$23
Capital gain rate = 0.1739
Capital gain rate = (0.1739)(100)
Capital gain rate = 17.39%
