Question 1 (a) If the annual interest rate is 3 percent, how long would you have...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question 1 (a) If the annual interest rate is 3 percent, how long would you have to wait before a $24,000 investment at least doubles in value? Assuming annual compounding, compute the minimum number of years required. (6 marks) (b) Jack is celebrating his 24th birthday today. He wants to start saving in one year's time, and retire after his 70th birthday. He decides to deposit the same amount of money on his birthday each year in a bank which offers 3% interest per year, compounded annually. Jack hopes to be able to accumulate SGD 700,000 for his saving account, after he made his scheduled deposit on 70th birthday). Determine the amount he must deposit annually. Round to nearest dollar. (c) (8 marks) You can invest SGD 100,000 in fixed deposit with a bank. The term of the deposit is 6 years, and the deposit rate quoted is 3.6%. Calculate the amount (round to 2 decimal places) you will have in 6 years, upon maturity of this fixed deposit, if the 3.6% is an APR but compounded quarterly. (7 marks) (d) You own a company. This company's projected revenue is $30,000 for year 1, $31,000 for year 2, and $32,000 for year 3. From the 4th year onwards, revenue is expected to be 5% higher than the previous year. Assume the appropriate nominal discount rate is 8%, and all revenue is collected at the end of each year. Determine the present value of your sales revenue for the first 15 years, round to 2 decimal places. (8 marks) Question 1 (a) If the annual interest rate is 3 percent, how long would you have to wait before a $24,000 investment at least doubles in value? Assuming annual compounding, compute the minimum number of years required. (6 marks) (b) Jack is celebrating his 24th birthday today. He wants to start saving in one year's time, and retire after his 70th birthday. He decides to deposit the same amount of money on his birthday each year in a bank which offers 3% interest per year, compounded annually. Jack hopes to be able to accumulate SGD 700,000 for his saving account, after he made his scheduled deposit on 70th birthday). Determine the amount he must deposit annually. Round to nearest dollar. (c) (8 marks) You can invest SGD 100,000 in fixed deposit with a bank. The term of the deposit is 6 years, and the deposit rate quoted is 3.6%. Calculate the amount (round to 2 decimal places) you will have in 6 years, upon maturity of this fixed deposit, if the 3.6% is an APR but compounded quarterly. (7 marks) (d) You own a company. This company's projected revenue is $30,000 for year 1, $31,000 for year 2, and $32,000 for year 3. From the 4th year onwards, revenue is expected to be 5% higher than the previous year. Assume the appropriate nominal discount rate is 8%, and all revenue is collected at the end of each year. Determine the present value of your sales revenue for the first 15 years, round to 2 decimal places. (8 marks)
Expert Answer:
Answer rating: 100% (QA)
a Future Value FV Previous Value PV Rater Periodt FVPV1r t ... View the full answer
Related Book For
Modeling the Dynamics of Life Calculus and Probability for Life Scientists
ISBN: 978-0840064189
3rd edition
Authors: Frederick R. Adler
Posted Date:
Students also viewed these accounting questions
-
You observe that the U.K. annual interest rate is 2.5 percent, the U.S. annual interest rate is 3.8 percent, the 3-month forward rate is $1.8180/, and the spot rate is $1.8034/. Assuming that...
-
Jack is celebrating his 24th birthday today. He wants to start saving in one years time, and retire after his 70th birthday. He decides to deposit the same amount of money on his birthday each year...
-
How much would you have to invest today to be able to withdraw $4,090 each month, for 25 months, (starting next month), if your investments earn 3.4% APR (compounded monthly)?
-
Using the Trust Services Principles and Criteria for the Online Privacy Principle, develop an online privacy policy for Alltel Stadium that could be posted on the stadiums website for customers to...
-
In selling a house, Matt tells Ann that the wiring, fixtures, and appliances are of a certain quality. Matt knows nothing about the quality, but it is not as specified. Ann buys the house. On...
-
Kearl Associates is a professional corporation providing management consulting services. The company initially debits assets in recording prepaid expenses and credits liabilities in recording...
-
Incomplete information concerning the financial performance of two manufacturing companies is presented below. Required Determine the answers to (a) to(f) for the two companies. Work in process,...
-
The following cumulative frequency polygon shows the hourly wages of a sample of certified welders in the Atlanta, Georgia, area. a. How many welders were studied? b. What is the class interval? c....
-
Conduct your own research and find an article/video/website about a drone application that is new (appears to have been developed within the last year). Briefly describe the application and how...
-
George Pharmacy is a pharmaceutical salesman who has been very successful at his job in the last few years. Unfortunately, his family life has not been very happy. Three years ago, his only child,...
-
(1 pt) A 14-year bond earns interest at 9 percent convertible semiannually and has a yield rate of 7.3 percent convertible semiannually. If the book value immediately after the 7th coupon payment is...
-
On January 1 , 2 0 2 2 the firm sells to you for $ 3 0 / share , 1 , 0 0 0 shares of no par common stock . There are now 1 0 , 0 0 0 shares issued and outstanding. You now own 1 0 % of the firm and...
-
Harris Fabrics computes its plantwide predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 29,000 direct labor-hours would be...
-
A sports arena can hold 18,500 people, plus or minus 1200 people. A. Write an absolute value equation to represent the number of people that can attend an event.
-
Discuss the importance of kernel integrity in an operating system. How do technologies like kernel address space layout randomization (KASLR) and trusted platform modules (TPM) contribute to kernel...
-
The integral x2x2 + 5d a can be rewritten as ff(u) du by making the substitution u = 2x +5. u= What is the function f(u)? f(u)-
-
A taxpayer provided a paid tax return preparer with detailed check registers reflecting personal and business expenses. One of the expenses was for domestic help, and this expense was identified as...
-
In each of the following independent cases, document the system using whatever technique(s) your instructor specifies. a. Dreambox Creations (www.dreamboxcreations.com/) in Diamond Bar, California,...
-
Finding equilibria of coupled differential equations requires solving simultaneous equations. The following are linear equations, where the only possibilities are no solutions, one solution, or a...
-
The probability of a value less than 0.9 drawn from a normal distribution with mean 0.5 and standard deviation 0.3. Use the cumulative distribution function for the standard normal, (z), to find the...
-
The given functions all have limits of 0 as x 0+. For each function, find how close the input must be to 0 for the output to be a) within 0.1 of 0, and b) within 0.01 of the limit. Sketch a graph of...
-
You are setting up a chatbot agency to service marketing, sales and customer services teams. Discuss the advantages and disadvantages of setting up the business as a sole trader or company and the...
-
Principles for Responsible Management Education (PRME) is a not-for-profit entity. It engages business schools to ensure they provide future leaders with the skills needed to balance economic and...
-
Entities are expected to perform in environmental, governance and social areas as well as profit (unless a not-for-profit entity). List some key performance indicators applicable to each sphere.
Study smarter with the SolutionInn App