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
Ymorist [56]
3 years ago
10

For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) a single amount or

an annuity, (2) the table you would use in your computations (but do not solve the problem), and (3) the interest rate and time periods you would use. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) a. You need to accumulate $10,000 for a trip you wish to take in four years. You are able to earn 8% compounded semiannually on your savings. You plan to make only one deposit and let the money accumulate for four years. How would you determine the amount of the one-time deposit? b. Assume the same facts as in part (a) except that you will make semiannual deposits to your savings account. What is the required amount of each semiannual deposit? (Round your answer to 2 decimal places.) c-1. You want to retire after working 40 years with savings in excess of $1,000,000. You expect to save $4,000 a year for 40 years and earn an annual rate of interest of 8%. Will you be able to retire with more than $1,000,000 in 40 years?
Business
1 answer:
taurus [48]3 years ago
5 0

Answer:

a. The present value of a future value of $10,000 is $7,310.

b. The present value of an annuity for a future value of $10,000 is $1,043.54.

c. Yes, you will retire with $1,036,226.07 .

Explanation:

a) Data and Calculations:

Future value = $10,000

Interest - 8% compounded semiannually

Period of investment = 4 years

Using the present value table, the discount factor of 0.731, the future value of $10,000 is $7,310

b) You will need to contribute $1,043.54 at the beginning of each period to reach the future value of $10,000.00.

FV (Future Value) $10,000

PV (Present Value) $7,306.90

N (Number of Periods) 8.000

I/Y (Interest Rate) 4.000%

PMT (Periodic Payment) $1,043.54

Starting Investment $0.00

Total Principal $8,348.30

Total Interest $1,651.70

c)  $1,000,000 in 40 years:

FV (Future Value) $1,036,226.07

PV (Present Value) $47,698.45

N (Number of Periods) 40.000

I/Y (Interest Rate) 8.000%

PMT (Periodic Payment) $4,000.00

Starting Investment $0.00

Total Principal $160,000.00

Total Interest $876,226.07

You might be interested in
You can buy an item for $125 on a charge with the promise to pay $125 in 60 days. Suppose you can buy an identical item for $115
Margarita [4]

Answer:

Effective annual interest rate=0.52%

Explanation:

Step 1: Express the formula for calculating interest

The formula for calculating interest can be expressed as;

I=PRT

where;

P=principal amount borrowed

R=annual interest rate as a percentage

T=number of years

Step 2: Determine the value of the variables P, R and T

In our case;

I=$10

P=(125-10)=$115

R=unknown=r

T=2 months=2/12=1/6 years

replacing in the expression;

10=115×r×(2/12)

10=(230/12)r

r=10×12/230=0.5217

0.5217 rounded off to the nearest 2 decimal places is:

r=0.52%

Effective annual interest rate=0.52%

4 0
3 years ago
suppose that there are no crowding out effects and the mpc is .9. by how much must the government increase expenditures to shift
user100 [1]

Answer: The answer is $ 1 billion.

Explanation:

MPC stands for the marginal propensity to consume.

If MPC is 9 it implies that the multiplier is 10 i.e 1/(1-0.9). The rise in aggregate demand is equal to multiplier times change in government expenditures so to boost aggregate demand by 10 billion dollar government has to increase expenditure by Dollar 1 billion.

7 0
3 years ago
Consumer demand for personal computers or smart devices ultimately determines the demand for the parts and materials involved in
Aliun [14]

Answer:

The correct answer is c. Derived demand .

Explanation:

Derived demand is the demand for goods and services that is generated as a result of the demand for other goods and services. This type of demand usually corresponds to the demand for factors or products, since the demand for a good or service may be related to the process necessary to produce another good or service, although it can affect both producers and consumers.

Derived demand can sometimes lead to an increase in the price of a marginal product, since the demand for the resources needed to produce a physical product also increases.

8 0
2 years ago
3) Bill weighs 220 pounds and is losing 4 pounds each month. Phil weigh 250 pounds and is losing 10 pounds each month. How many
Anit [1.1K]

5 months and 200 pounds

4x5 = 20

220-20

200

10x5 = 50

250-50

200

6 0
3 years ago
You are taking a $6,226 loan. You will pay it back in four equal amounts, paid every year, with the first payment occurs at the
Pavlova-9 [17]

Answer:

annual payment = $2,362.88

Explanation:

we must first calculate the future value of the loan at the end of year 4 = $6,226 x (1 + 11%)⁴ = $9,451.51

using the present value of an annuity formula we can determine the annual payment:

annual payment = present value of an annuity / PV annuity factor

  • present value of an annuity = $9,451.51
  • PV annuity factor 11%, 4 periods = 3.1024

annual payment = $9,451.51 / 3.1024 = $2,362.88

4 0
3 years ago
Other questions:
  • HElP PLEEEASE!!
    15·2 answers
  • The business side of IT is very different from the business itself. T/F
    7·1 answer
  • Choose a real or made up example of a company, and describe at least three fixed costs the company has.
    10·1 answer
  • The corporate charter of Torres Corporation allows the issuance of a maximum of 4,000,000 shares of $1 par value common stock. D
    13·1 answer
  • Are the following movements or shifts along/of the demand curve:
    14·1 answer
  • Which of the following is a good way to improve your credit score?
    14·2 answers
  • If Track Changes is used in a document, what steps are critical to perform before sharing the final version of a document?
    14·2 answers
  • On June 30, 2020, Pier1 Inc. issued 500 shares of $1 common stock for $15 per share. On June 30, 2020, Pier5 Inc. reacquired 100
    9·1 answer
  • A bond has a $1,000 face value, a market price of $989, and pays interest payments of $69.50 every year. What is the coupon rate
    6·1 answer
  • First Rentals purchased office supplies on credit. The general journal entry made by First Rentals will include a:
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!