Answer:
To minimize risk, investors should investigate the market and diversify its portfolio.
Interest that builds on the principle and the interest already gained is compound interest
Money invested in a CD
always have a fixed rate of return and is less risky than money used to purchase a home.
Answer:
Compound interest; amortized loans; amortization schedule; largest; decline; smallest; increases.
Explanation:
An important application of compound interest involves amortized loans. Some common types of amortized loans are automobile loans, home mortgage loans, and business loans. Each loan payment consists of interest and repayment of principal. This breakdown is often developed in an amortization schedule. Interest is largest in the first period and declines over the life of the loan, while the principal repayment is smallest in the first period and it increases thereafter.
Amortization in accounting is used to periodically lower the book value of a loan principal or an intangible asset such as intellectual property over a set period of time.
The compound interest formula is given below;
Where;
A is the future value.
P is the principal or starting amount.
r is annual interest rate.
n is the number of times the interest is compounded in a year.
t is the number of years for the compound interest.
Answer:
Option (B) is correct.
Explanation:
Sales forecast = 2079 units
Ending Inventory to be maintained:
= 10% of forecast sales
= 10% (2079 units)
= 208 units
Production:
= Sales + Ending Inventory - Beginning Inventory
= 2079 units + 208 units - Nil
= 2,287 units
Taking current inventory into account, Dell's Production of 2,287 units After Adjustment have to be in order to have a 10% reserve of units available for sale.
Answer:
You must deposit $14,824.07
Explanation:
Giving the following information:
Sister:
Investment= $14,000
Interest rate= 10.5%
Number of years= 9
You:
Investment=?
Interest rate= 9.8%
Number of years= 9
First, we need to calculate the future value of your sister:
FV= PV*(1+i)^n
FV= 14,000*(1.105^9)= $34,386.55
Now, we can determine your deposit:
PV= FV/(1+i)^n
PV= 34,386.55/ (1.098^9)= $14,824.07