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Eduardwww [97]
3 years ago
12

Why is compound interest preferable to simple interest when investing?

Business
1 answer:
lions [1.4K]3 years ago
3 0

Answer:

O Compound interest pays interest both on the principal and the interest earned in each period.

Explanation:

Compound interest is preferred as it measures the interest on the principal amount and the accrued interest. In the compounding interest, the interest i.e. earned should be added to the principal in order to create the new principal amount. The interest earned at the closing of every year should be more than the last period as the principal amount rises at the starting of the period

Also, the interest earned via the compound interest should be grown much faster as we compared to the fixed rate interest

Therefore the last option is correct

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Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of go
erik [133]

Answer:

- The quality and design of calculators improved dramatically from 2017 to 2019.

- A new, safe method of memory enhancement became available for purchase.

- As the price of textbooks increased, more and more students turned to the used-book market or chose not to buy textbooks at all, instead of using the copies on reserve in the library.

Explanation:

Remember, regarding the prices for the textbooks the factors of demand applies that is why when prices increase, it might result in an overstating; which means inflation in the cost of going to college.

Also, just as improvements in the memory of calculators involves additional expenses, it results in inflation. Overall, all these circumstances can result in such inflation.

7 0
3 years ago
Cyclical unemployment is closely associated with Select one: a. long-term economic growth. b. short-run ups and downs of the eco
kiruha [24]

Answer:

b. short-run ups and downs of the economy.

Explanation:

Cyclical unemployment is a form of employment that occurs as a result of fluctuations in the economy.

When there's a downturn in the economy, unemployment increases and It falls when there's a boom.

I hope my answer helps you

7 0
3 years ago
Read 2 more answers
Net credit sales for the year are $750,000. The end of year accounts receivable balance is $160,000. The allowance for doubtful
alexandr402 [8]

Answer: $3000

Explanation: Allowance for doubtful accounts is the contra account to accounts receiveable when all the bad debts need to be accounted for. The bad debts reduces the accounts receivable line but all bad debts are actually deducted from the allowance for doubtful accounts.

The allowance for doubtful accounts for that year is calculated as 5% of the accounts receivable balance. This amounts to $8000 (160000 x 5%) before bad debts have been accounted for. Allowance for doubtful accounts moves in the opposite direction as accounts receivable because it is a contra account to this line item. At the end of the year before year end closing entries are done, and after the bad debts have been accounted for, the balance on the allowance for doubtful accounts is $5000.

This means that bad debts for that year is:

8000 (balance before bad debts have been accounted for)

- 5000 (balance after bad debts have been accounted for)

= $3000.

5 0
3 years ago
A _____ is something that has been learned.
vfiekz [6]
Hello,

A fact is something that has been learned.

I think, Im not 100% sure!
6 0
3 years ago
Read 2 more answers
You have just received a windfall from an investment you made in a​ friend's business. She will be paying you $ 15 comma 555 at
Vilka [71]

Answer:

Present value = $75,379.47

Future value is $91,567.97

Explanation:

a) Present value of cash flow is calculated as:

Present\ value = \frac{(15,555}{1.067} + \frac{(31,110}{(1.067)^2}) + \frac{(46,665}{(1.067)^3})

Present value = $14578.25 + $27,325.69 + $33475.53

Present value = $75,379.47

b) Future value of windfall is calculated as

Future\ value  = present\ value \times (1-r)^n

Future\ value  = 75379 \times (1+ 0.067)^3

Future value is $91,567.97

7 0
2 years ago
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