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jeyben [28]
2 years ago
7

Peter wishes to create a retirement fund from which he can draw when he retires and the same amount at each anniversary of his r

etirement for years. He plans to retire years from now. What investment need he make today if he can get a return of per year, compounded annually
Business
1 answer:
uranmaximum [27]2 years ago
3 0

Answer:

$65,742.60

Explanation:

Note: The full question is <em>"Peter wishes to create a retirement fund from which he can draw $20,000 when he retires and the same amount at each anniversary of his retirement for 10 years. He plans to retire 20 years from now. What investment need he make today if he can get a return of 5% per year, com- pounded annually?"</em>

At first, we need to find the PV of withdrawals and there are 11 withdrawals starting 20 years from now.  

PV = PMT/r * 1 - 1/(1+r)^n. This formula gives the PV one period before the first withdrawal. That is 19 years from now because the first withdrawal is 20 years from now.

PMT = 20,000, n = 11,  

r = 0.05

PV19 = 20,000/0.05 * [1 - 1/(1+0.05)^11]

PV19 = 400,000 * 0.4153207109

PV19 = 166,128.28436

Now, we need to discount this back to toda

PV0 = PV19/(1 + r)^n; n = 19, r = 0.05

PV0 = 166,128.28436/(1 + 0.05)^1

PV0 = $65,742.6033421702

PV0 = $65,742.60

So, Peter needs to make $65,742.60 today.

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Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps bank
Mamont248 [21]

Complete Question: Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps the banks to ________.

A) reduce the rate of customer defection

B) make low-profit customers more profitable

C) enhance the growth potential for each customer through cross-selling

D) increase the longevity of the customer relationship

E) focus disproportionate effort on high-value customers

Answer:

B) make low-profit customers more profitable

Explanation:

Many banks and phone companies now charge fees for once-free services to ensure minimum customer revenue levels. This helps the banks to make low profit customers more profitable.

The basic logic behind this strategy is that when customers find something coming free, then they start taking it for granted, they don't pay much attention to it, therefore, when the some services are free, customers will not be spending much on them, like upgrading, monthly plan up-gradations, monthly or annual subscriptions. Consequently, to turn the those customers into highly valuable customers, companies charge for the services which were free of cost in the past.

3 0
3 years ago
Analytic communicator
forsale [732]

Answer:

A personal meeting

Voice mail

Explanation:

Though various means of reaching through to individuals differ, however, depending on the gravity or severity of the information to be communicated, you be might be forced to make a somewhat crude means of communication. However, when informations require the passage of specific illustrations and also to show how important the information that is about to be passed on his.organizing a personal meeting might be more satisfactory. However, in many instances, do stance posses a barrier and another means of communication whereby distance doesn't pose a threat may need to be adopted . This include text messages. Emails

voice mails and so on.

8 0
2 years ago
Assume that Mahmood Corp. lends Ahmad $10,000 in exchange for a $10,000,
kolezko [41]

Answer:

1) the present value of the note:

PV of face value = $10,000 / (1 + 8%)³ = $7,938.32

PV of interest payments = $1,000 x 2.5771 (PV annuity factor, 8%, 3 periods) = $2,577.10

PV of note = $10,515.42

2) Dr Notes receivable 10,515.42

         Cr Cash 10,000

         Cr Discount on notes receivable 515.42

3) assuming the loan was made January 2, 2021

Date                         Cash flow     Discount         Balance

January 2, 2021       -$10,000                             $10,515.42

January 2, 2022       $1,000        $171.81            $10,343.61

January 2, 2023       $1,000        $171.81             $10,171.80    

January 2, 2024       $11,000       $171.80                  $0

4) December 31, accrued interest on notes receivable

Dr Interest receivable 1,000

Dr Discount on notes receivable 171.81

      Cr Interest revenue 1,171.81

7 0
2 years ago
Futura Inc. introduced an automobile that could run completely on electricity for longer periods of time than any other electron
Juli2301 [7.4K]

Answer:

Disruptive innovation.

Explanation:

Disruptive innovation is one that creates the way a market operates, that is it creates a new market and disrupts the old one. Existing firms and products are displaced.

In this instance when Futura Inc. introduced an automobile that could run completely on electricity for longer periods of time than any other electronic or hybrid automobile, it introduced a product that will cause disruptions in the current automobile industry.

Although there was challenges of frequent repairs, this was eventually resolved.

8 0
3 years ago
To cater to the growing demand for luxury automobiles, Italy agrees to buy 5,000 cars from Comfort Cars Inc. in exchange for 5,0
kupik [55]

Answer: barter

Explanation:

Barter is an exchange system whereby money isn't used as the medium of exchange but rather, there's a direct exchange of goods or services.

From the question, we are given the information that Italy agrees to buy 5,000 cars from Comfort Cars Inc. in exchange for 5,000 barrels of oil. This shows that a barter system took place.

7 0
3 years ago
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