The formula is
A=p (1+rt)
A future value 1650
P present value 1200
R interest rate 0.08
T time?
1650=1200 (1+0.08t)
Solve for t
Divide both sides by 1200
1650/1200=1+0.08t
Subtract 1 for both sides
(1650/1200)-1=0.08t
Divide both sides by 0.08
T=((1,650÷1,200)−1)÷0.08
T=4.69 years round your answer to get 5 years
Another way using the formula of simple interest
I=prt
I interest earned which can be found by subtracting the present value from the future value (A-p)=1650-1200=450.
P principle 1200
R interest rate 0.08
T time?
Solve the formula for t
T=I/pr
T=450÷(1200×0.08)
T=4.69 years round your answer to get 5 years
Hope it helps!
Answer:
Is experiencing an inflationary gap.
Explanation:
An inflationary gap can be defined as a macroeconomic concept which measures the difference between the actual output (Real Domestic Products) and the potential output (Gross Domestic Products) when an economy is being operated at full employment.
Hence, if actual output exceeds potential output, the economy is experiencing an inflationary gap. This simply means that, the consumers are demanding more of the goods and services than the economy (business entities) can produce or provide at a specific period of time. <em>Also, when an inflationary gap occurs in an economy, there would be an increase in the price of goods and services and thus, causing the economy to be out of equilibrium. </em>
Answer:
According to the data provided the opportunity costs is detailed below:
Initial Balance $20,000
Monthly interst $200
Investment $500
________________________
The Opportunity cost is $500
Explanation:
The opportunity cost is the price you pay for not choosing best second alternative when you make a decision. In this case the person has three options:
1. Spending the money
2. Save the money
3. Invest the money
Once the money is spent the opportunity costs is generated and it is measured by the interest rate lost for not keeping the money in the investment that will generate an interest rate of $500 monthly.
Answer:
D. $605,500
Explanation:
The computation of the expected balance in retained earnings on the 2018 is shown below:
The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid
= $533,500 + $112,000 - $40,000
= $605,500
We simply applied the above formula so that the ending balance could arrive by considering all the items given in the question
Answer:
Equal to
Explanation:
Financial theory assumes that financial markets are efficient and that there is no information failure in conducting financial transactions. However, this is an assumption and there could, in some instances, be asymmetric information in the form of adverse selection and moral hazards. For example, if managers of a corporation know how well or how poorly their business is doing than stockholders (as organizational performance determines the price of a security), then there would be an information failure or informational inefficency. Also, a potential investor who cannot distinguish between a firm whose security has a high potential for profit and low risks compared to that with a low potential for profit and high risk will be willing to pay a price that lies between the value of stock from bad firms and the value of stock from good firms. This will not augur well for good firms as their stock is underpriced and they will be reluctant to sell.
When the financial market is efficient, investors of stock would be able to earn supernormal returns on their investments. It is therefore neccessary that the price of a corporation's common stock should be equal to the present value estimate of the firm's expected cash flows discounted by it appropriate rate of return.
