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kari74 [83]
2 years ago
8

If you have a choice to earn simple interest on $10,000 for three years at 8% or annually compounded interest at 7.5% for three

years which one will pay more and by how much
Business
1 answer:
weeeeeb [17]2 years ago
8 0

Answer:

The compound interest will yield $22.97 more than simple interest.

Explanation:

Giving the following information:

Initial investment (PV)= $10,000

Interest rate (r)= 8% simple interest

Interest rate (i)= 7.5% compound interest

Number of periods= 3 years

<u>To calculate the future value of both options, we need to use the following formulas:</u>

Simple interest:

FV= PV*r*t + PV

FV= 10,000*0.08*3 + 10,000

FV= $12,400

Compound interest:

FV= PV*(1 + i)^t

FV= 10,000*(1.075^3)

FV= $12,422.97

The compound interest will yield $22.97 more than simple interest.

You might be interested in
PRESENT VALUE OF AN ANNUITY Find the present values of these ordinary annuities. Discounting occurs once a year. 1. $600 per yea
NikAS [45]

Answer:

    ordinary   // annnuity-due

1.- 4,521.65   //  4,883.38

2.- 1,572.64  //  1,635.54

4.- 3,000.00 //  3,000

Explanation:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 600.00

time 12

rate 0.08

600 \times \frac{1-(1+0.08)^{-12} }{0.08} = PV\\

PV $4,521.6468

Annuity-due

600 \times \frac{1-(1+0.08)^{-12} }{0.08}(1+0.08) = PV\\

PV $4,883.3786

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 300.00

time 6

rate 0.04

300 \times \frac{1-(1+0.04)^{-6} }{0.04} = PV\\

PV $1,572.6411

Annuity-due

1,572.6411 x 1.04 = $1,635.5467

4.- as interest rate is 0% the money do not lose value over time

will be 3,000 regardless of time or type of annuity

4 0
2 years ago
On April 1, Otisco, Inc. paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines. Otisco
SSSSS [86.1K]

Answer:

advertizing expense 387 debit

    prepaid expense       387 credit

--to record expired advertizing at year-end ---

Explanation:

1,548 is the value of 36 months

from April to December 31th 9 months has expired thus:

1,548 x 9/36 = 387 expired advertizing

we will decrease our prepaid and post the advertizing expense for the expired amount

the prepaid is considered an asset as we have the right to receive advertize of our product and brand for the term of the contract thus, to decrease it we credit

the expense as decrease our equity will be debited

4 0
2 years ago
How might a Product Owner (PO) adjust team events to take advantage of this capability and promote the flow of value?
zlopas [31]

Answer:

hello your question is incomplete below is the complete question

An Agile Release Train (ART) has implemented a completely automated Continuous Integration/Continuous Delivery (CI/CD) pipeline that can deploy code as it is checked into the source-code repository. How might a Product Owner (PO) adjust team events to take advantage of this capability and promote the flow of value? 1. Release Stories that have been included in the team demo 2. Review and accept Stories as they are completed 3. Identify Stories that are cleared for automatic delivery during Iteration Planning 4. Implement Feature toggles to control which Stories are released

answer :  Identify Stories that are cleared for automatic delivery during Iteration Planning ( 3 )

Explanation:

The Best way a product owner( PO ) can adjust team events in order to take advantage of this capability and promote the flow of values is ; Identify Stories that are cleared for automatic delivery during Iteration Planning.

This is because this options identifies ART and its clearance.

6 0
2 years ago
Green Company is planning to introduce a new product with a 75 percent incremental unit-time learning curve for production in ba
sweet-ann [11.9K]

Answer:

210 hours

Explanation:

The learning curve rate can be found by log75%

Ln0.75 = 0.12249

1 batch requires 200 hours

The 1500 units batch will require 200 hours

For 3000 units there will be two batches of 1500 units each

200 hours * 2 batches * 0.12249 * 4.5 = 210 hours

6 0
2 years ago
A company currently makes a component used in production. The per unit costs incurred to make the component include: Direct mate
elixir [45]

Answer:

The company should make the components because incremental costs are $2 less than the purchase price

Explanation:

The cost of making each unit of component = Direct Labour + Direct Material + Variable Overhead*

*The overhead cost of $4 contains both a fixed and variable element. It has been mentioned that 25% of overhead cost is incremental i.e. it increases with each additional unit produced (marginal cost). The incremental cost is the variable element.

Variable element = $4 x 25% = $1

Fixed element = $4 x 75% = $3

Thus, the cost of making each unit of component = $5 + $2 + $1 = $8,

whereas the cost of purchasing each unit of complement is $10. Hence, the company should produce the component as it is less by $2 ($10 - $8) to produce than it is to purchase.

5 0
2 years ago
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