1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
soldi70 [24.7K]
3 years ago
11

Mike Finley wishes to become a millionaire. His money market fund has a balance of $403,884 and has a guaranteed interest rate o

f 12%. How many years must Mike leave that balance in the fund in order to get his desired $1,000,000?
Assume that Sally Williams desires to accumulate $1 million in 15 years using her money market fund balance of $209,004. At what interest rate must Sallyâs investment compound annually? (Round answer to 0 decimal places, e.g. 5%.)
Business
1 answer:
kipiarov [429]3 years ago
7 0

Answer:

<u>Mike Finley</u>

t = 7.999983133 years rounded off to 8 years

<u>Sally Williams</u>

r = 0.110000123 or 11.0000123% rounded off to 11.00%

Explanation:

<u>Mike Finley</u>

To calculate the time period it will take Mike Finley to become a millionaire, we will use the formula of future value of cash flow. The formula for future value of cash flow is as follows,

Future value = Present value * (1+r)^t

Where,

  • r is the interest rate or rate of return
  • t is the time period in years

Plugging in the values for Future value, present value and r in the formula, we can calculate the t to be,

1000000 = 403884 * (1+0.12)^t

1000000 / 403884  =  1.12^t

2.475958444 = 1.12^t

Taking log on both sides.

ln(2.475958444) / ln(1.12)  =  t

t = 7.999983133 years rounded off to 8 years

<u>Sally Williams</u>

<u />

We will use the same formula for future value of cash flows as we used above to calculate the rate at which investment should be compounded annually to grow to $1 million.

1000000 = 209004 * (1+r)^15

1000000 / 209004 = (1+r)^15

4.784597424 = (1+r)^15

Taking root of 1 on both sides.

(4.784597424)^1/15  =  (1+r)^15 * 1/15

1.110000123  =  1+r

1.110000123 - 1 = r

r = 0.110000123 or 11.0000123% rounded off to 11.00%

You might be interested in
The price of a stock today is $100. next year, the stock price will be either $120 or $90. the risk-free rate is 3% per year. wh
fredd [130]
A. The put option price is $4.00
5 0
3 years ago
Companies that have preferred stock outstanding promise to pay a stated dividend for an infinite period. Preferred stock is trea
mel-nik [20]

Answer:

$74.63 per share

Explanation:

The computation of the value of preferred stock is shown below:

As we know that  

Value of the preferred stock = Annual dividend rate ÷ Returns on the stock

where,

Dividend on the preferred stock = Dividend rate × Par value

= 11% × $100

= $11

And, the return is 14.74%

So, the value of the preferred stock is  

= $11 ÷ 14.74%

= $74.63 per share

6 0
3 years ago
During 2019, Stephie worked full-time while her spouse, Tom, attended college for 8 months during the year. The couple has two c
lisabon 2012 [21]

The credit for child and dependent care expenses that Stephie and Tom can claim for 2019 is $6,000.

<h3>What is the credit for child and dependent care expenses?</h3>

The credit for child and dependent care expenses claimable on the federal income tax return is $3,000 per child for 2019.

For two qualifying children, the maximum credit for child and dependent care expenses that the couple who are filing jointly can claim is $6,000 ($3,000 x 2).

Thus, the credit for child and dependent care expenses that Stephie and Tom can claim for 2019 is $6,000.

Learn more about the credit for child and dependent care expenses at brainly.com/question/15025351

#SPJ1

3 0
1 year ago
the cost of quality has two components: the cost of good quality. the costs for good quality are the cost of monitoring and prev
Marta_Voda [28]

Answer: Quality is never costless because monitoring and prevention have costs

Explanation:

The cost of quality has two parts which are the cost of prevention and the cost of failure. The cost of quality simply refers to the sum of the prevention cost and the cost of failure.

It should be noted that spending more on prevention helps in reducing the cost of failure. According to experts, quality is is never costless because monitoring and prevention have costs.

8 0
3 years ago
Can you help me with my map test please?..!!
andrew11 [14]

Answer:

The answer is 2 the thick tree branches had shiny red apples hanging from them

6 0
2 years ago
Other questions:
  • World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company
    14·1 answer
  • The two attributes that define a threat are
    7·1 answer
  • The incredible shrinking​ $50 bill in 1957 was worth​ $50, but in 2007 it is worth only ​$. a. What was the compounded average a
    7·1 answer
  • Brad, a project manager, wants to build a database to integrate information about employees and tasks that they handle. Brad wan
    9·1 answer
  • A Restaurant is open only for 25 days in a month. Expenses for the restaurant include raw material for each sandwich at $4.00 pe
    10·1 answer
  • If the government removes a binding price floor from a market, then the price received by sellers will
    12·1 answer
  • The Hi-Stakes Company has a number of importing and exporting transactions. Importing activities result in payables and exportin
    14·1 answer
  • Cynthia, a sole proprietor, was engaged in a service business and reported her income on the cash basis. On February 1, 2013, sh
    6·1 answer
  • A type of pricing strategy we’re in the same product being sold at a different place but have different price
    15·1 answer
  • Tobin inherited 100 acres of land on the death of his father this year. A Federal estate tax return was filed and the land was v
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!