iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiihhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhi

How Much Have I Saved? Portfolio

avanturin [10]

The time value of money calculation can be performed using formula equations or online calculators.

The correct responses are;

1) Option 3

2) Option 2

3) The difference in principal is approximately $8,000

The difference in interest earned is approximately $2,977.87

4) It is better to invest more money at the beginning of the 30 years

Reasons:

Option 1: Present value = 0

Amount invested per month, A = $25/month

The Annual Percentage Rate, APR, r = 3.25%

Number of years = 30

The future value of an annuity is given by the formula;

$\displaystyle FV_{A} = \mathbf{A \cdot \left (\frac{ \left(1 + \frac{r}{m} \right)^{m\cdot t} - 1}{\frac{r}{m} } \right)}$

In option 1, m = 12 periods per year

Therefore;

$\displaystyle FV_{A} = 25 \times \left (\frac{ \left(1 + \frac{0.0325}{12} \right)^{12 \times 30} - 1}{\frac{0.0325}{12} } \right) \approx \mathbf{15,209.3}$

Contribution = $25 × 12 × 30 = $9,000

Total interest earned = $15,209.3 - $9,000 = $6,209.3

Final balance = $15,209.3

Option 2: Present value = 0

Amount, A = $75/quarter

m = 4 periods per year

The Annual Percentage Rate, APR = 4.00%

Therefore;

The effective interest rate is therefore;

$\displaystyle r_{eff} = \left(1 + \frac{0.04}{4} \right)^4 - 1 \approx \mathbf{0.04060401}$

$\displaystyle FV_{A} = 75 \times \left (\frac{ \left(1 + \frac{0.04060401}{4} \right)^{4 \times 30} - 1}{\frac{0.04060401}{4} } \right) \approx 17,437.7$

Using an online calculator, FV = $17,467.04

Contribution = $75 × 4 × 30 = $9,000

Total interest earned = $17,467.04 - $9,000 = $8,467.04

Final balance = $17,467.04

Option 3: Present value = $1,000

APR = 6.25%

m = 12 period per year

Number of years, t = 30 years

Therefore;

$\displaystyle FV = \left (1 + \frac{0.0625}{12} \right)^{12 \times 30} \approx \mathbf{6,489.17}$

Contribution = $1,000

Total interest earned = $6,489.17 - $1,000 = $5,489.17

Final balance = $6,489.17

The table of values is therefore;

$\begin{tabular}{|c|c|c|c|}Option \# &Contribution &Total Interest Earned&Final Balance\\1&\$9,000&\$6,209.3 & \$15,209.3\\2&\$9,000&\$8,467.04 &\$17,467.04\\3&\$1,000&\$5,489.17&\$6,489.17\end{array}\right]$

1) The option that has the least amount invested are option 3

Option 3 investment plan is a present value of $1,000, invested for 30 years at 6.25% APR compounded monthly.

2) Option 2 yielded the highest amount at the end of 30 years, given that the APR is higher than the APR for option 1, although the amount invested over the period are the same.

The basis of option 2 investment plan is $75 invested quarterly at 4.00% APR compounded monthly for 30 years.

3) The difference in the principal invested for the highest and lowest final balance is $9,000 - $1,000 = $8,000

The difference in the interest earned is; $8,467.04 - $5,489.17 = $2,977.87

4) In option 1 the present value is zero, therefore zero amount was invested at the beginning.

The interest to investment ration is 6,209.3:9,000 ≈ 0.7:1

In option 3, all the money was invested at the beginning.

The interest to investment ratio of option 3 is; 5,489.17:1,000 ≈ 5.5:1

Given that the interest to investment ratio, which is the return on investment is larger when more money is saved at the beginning as in option 3, it is better to invest more money at the beginning.

Learn more about future value of an annuity here:

brainly.com/question/8243704

3 0

3 years ago

A circular cake with a radius of 8 inches is cut from the center into 6 equal pieces. How many inches wide, to the nearest tenth

aalyn [17]

Answer: 8.4 inches.

Step-by-step explanation:

We know that the circumference of a circle can be calculated with this formula:

$C=2\pi r$

Where "r" is the radius of the circle.

We know that the circular cake (whose radius is 8 inches) is cut from the center into 6 equal pieces. Then, you need to divide the circumference of this circular cake by 6 to find the width of the outer edge of each piece of cake.

Therefore, this is (to the nearest tenth of an inch):

$C=\frac{2\pi (8in)}{6}\\\\C=8.4in$

5 0

3 years ago

Read 2 more answers

The financial statements of the Tyler Company report net sales of $300,000 and accounts receivable of $50,000 and $10,000 at the

iragen [17]

Answer:

the accounts receivable turnover for the Tyler Company is 10

Step-by-step explanation:

The company report :

net sales = $300,000

account receivable = $50,000 and $10,000

to find the accounts receivable turnover, use the following formula:

accounts receivable turnover = net sales : average account receivable

First, we need to calculate the average account receivable of the company

average accounts receivable = ($50,000+$10,000) : 2

= $60,000 : 2

= $30,000

Then, substitute net sales into the formula

accounts receivable turnover = $300,000 : $30,000

= 10

4 0

3 years ago

A tour director collected $258 for 13 tour packages tour packages a cost $18 into a package requires $22 how many of each tour p

Lena [83]

Answer:

Step-by-step explanation:

X+Y = 13

$18 + $22 = $258

OR

18X+22Y=258

18X + 22(13 - X) = 258

18X + 286 - 22X = 258

286 - 4X = 258

-4X= 258 - 286

-4X = -28

X= 7

Y=6

7 of the X tour packages & 6 of the Y tour packages

4 0

3 years ago

2 1/2 + 3 As a fraction or a mixed number in simplest form. please Thankss ;p

puteri [66]

5 1/2 i think is the answer

5 0

3 years ago

Read 2 more answers