Question 5 of 10

Jennifer's pension plan is an annuity with a guaranteed return of 7% per year (compounded monthly). She can afford to put $300 p

givi [52]

Answer:

She will receive $3,494.95 per month.

Explanation:

Jennifer's pension plan is an example of a sinking fund.

A sinking fund is an account that earns compound interests and into which periodic payments are also made.

The formula for calculating the future value of payments in a sinking fund account is given as:

$FV=PMT\frac{(1+\frac{r}{n} )}{\frac{r}{n} } ^{n*t}$

where:

FV = Future value

PMT = periodic payment = $300

r = interest rate in decimal = 7% = 0.07

n = compounding period per year = monthly = 12

t = number of years compounded = 40

hence:

$FV=300\frac{(1+\frac{0.07}{12} )}{\frac{0.07}{12} } ^{12*40}$

$300*\frac{(1.005833)^{480}}{0.005833} =300* 2,795.96$

∴FV = $838,786.8

Finally, we are asked to calculate the amount she will be paid per month in a 20-year payout period, and this is shown below:

20 years = 12 months × 20 = 240 months

Therefore, amount to be paid in a 240 month period =

future value ÷ total number of months 838,786.8 ÷ 240 = $3,494.95

3 0

3 years ago

By examining the spreadsheet below, what part of the financial plan might be missing? A 2-column spreadsheet showing Cash Inflow

vitfil [10]

The correct statement is that in the spreadsheet below, a financial plan for protecting assets is missing. So, the correct option is C.

A financial plan for protection of assets is advisable for such individual for better insurance against any unwanted losses or damages to property(s).

<h3>Financial Plan</h3>

A financial plan refers to as the interpretation and conclusion of a cash flow after ascertaining the inflows and outflows of the firm.

The above cash flow statement shows that the spending have not been done on premiums for insurance for protection of assets of the individual.

There seems a requirement for the financial plan to be made in such a way that a part of expenditure outflow is done towards insuring the assets.

Hence, the correct option is C that in the spreadsheet below, a financial plan for protecting assets is missing.

Learn more about Financial Plan here:

brainly.com/question/1323646

4 0

3 years ago

Read 2 more answers

On January 1, 2021, Cullumber Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the

Alenkinab [10]

Answer & Explanation:

December 31, 2021

Compensation Expense 164,200

Paid-in Capital (328,400 x 0.5) 164200

To record compensation expense

April 1, 2022

Paid-in Capital 32,840

Compensation Expense (328,400 x 2100/21000) 32,840

To record termination of stock option

December 31, 2022

Compensation Expense 147,780

Paid-in Capital (328,40 x 1/2 x 18900/21000) 147,780

To record compensation expense

March 31 , 2023

Cash ( 12,600 x $25) 315,000

Paid-in Capital (328,400 x 12,600/21,000) 197040

Common Stock (21,000 x $10) 126,000

Paid-in Capital in Excess of Par 386,040

To record exercise of stock option

December 31, 2023

6,300 stock options not exercised (21,000 - 2,100 - 12,600)

5 0

3 years ago

Jay has a tax basis of $14,000 in his partnership interest at the beginning of the partnership tax year. The following amounts o

Snezhnost [94]

Answer:

B

Explanation:

Details Amt $

Jay's Tax basis in the partnership= 14,000

Loss Allocated to Jay in the current Year 15,000

So Loss suspensed due to Tax basis limitation= 1,000

Non recourse debt of Jay 500

So At risk amount =$14000-$500= 13,500

Remaining loss not suspended= 14,000

So out of $14000 loss not suspended , an amount

of $500 will be further suspended for at risk

limitation.

So Jay could deduct only $13500 loss after this.

So correct option is b . $1000, $500

3 0

3 years ago

Use the midpoint method to calculate the price elasticity of demand for potato chips that increased in price from $2.00 to $3.00

Flura [38]

Answer:

-1.67

Explanation:

Price elasticity of demand using midpoint method can be formulated as below:

Price elasticity of demand = {(Q_2 - Q_1)/[(Q_2 + Q_1)/2]}/{(P_2 - P_1)/[(P_2 + P_1)/2]}, where:

<em>Q_1 and Q_2 are the volumes before and after price changes;</em>

<em>P_1 is initial price and P_2 is new price.</em>

Putting all the numbers together, we have:

Price elasticity of demand = {(50-100)/[(50+100)/2]}/{(3-2)/([(3+2)/2]} =

- 1.67

Note: Negative sign indicate that when price increases volume will decrease.

4 0

3 years ago