You have just received a windfall from an investment you made in a friend's business. He will be paying you $10,000 at the end of this year, $20,000 at the end of the following year, and $30,000 at the end of the year after that (three years from today). The interest rate is 3.5% per year. a.What is the present value of your windfall? b.What is the future value of your windfall in three years (on the date of the last payment)?
Answers
Answer:
a. $55,390.29
b. $61,412.20
Step-by-step explanation:
a. To find the present value of your windfall, each value must be brought back to the present year at a rate of 3.5% per year. The present value is:
The present value of your windfall is $55,390.29.
b. To find the future value of your windfall at the date of the last payment, simply compound the preset value amount obtained on the previous item for three years at a rate of 3.5%:
The future value of your windfall is $61,412.20.
Final answer:
The present value and future value of an investment are calculated using formulas that account for the interest rate and the period. The present value is calculated by dividing each year's payout by the increment of the interest rate for that year and summing these values. The future value in this scenario would be the sum of the payouts.
Explanation:
This question deals with the financial concepts of present value and future value in relation to an investment payout structure over time.
a. The present value is a measure of the current worth of a future sum of money given a specified rate of return. The formula to calculate present value is PV = CF / (1 + r)^n, where CF is cash flow, r is interest rate and n is the period. To calculate the present value of your windfall:
- End of Year 1: PV = $10,000 / (1+0.035)^1
- End of Year 2: PV = $20,000 / (1+0.035)^2
- End of Year 3: PV = $30,000 / (1+0.035)^3
Add all these present values together to get the total present value.
b. The future value is how much an investment is worth at a certain time in the future. The formula to calculate future value is FV = CF * (1 + r)^n. But in this case since the last cash flow coincides with the period, the future value in three years would simply be the sum of all cash flows which is $60,000 ($10,000+$20,000+$30,000).
Learn more about Present Value and Future Value here:
#SPJ3
Related Questions
Liam is a rewards member at a local restaurant. He can buy four tacos at regular price and get 5.50 off of his purchase. Zachary found a coupon to buy three tacos at regular price and get 6.50 off his total. What would the taco price x need to be in order for Liam and Zachary to spend the same amount?
Describe the steps that transform the graph of the function y=x^2 to y=2(x+3)^2. Which attributes are not affected by the transformation?
What does deleted account mean on a answered questionWaiting for answer on hraph
Consider a disease whose presence can be identified by carrying out a blood test. Let p denote the probability that a randomly selected individual has the disease. Suppose n individuals are independently selected for testing. One way to proceed is to carry out a separate test on each of the n blood samples. A potentially more economical approach, group testing, was introduced during World War II to identify syphilitic men among army inductees. First, take a part of each blood sample, combine these specimens, and carry out a single test. If no one has the disease, the result will be negative, and only the one test is required. If at least one individual is diseased, the test on the combined sample will yield a positive result, in which case the n individual tests are then carried out. [The article "Random Multiple-Access Communication and Group Testing"† applied these ideas to a communication system in which the dichotomy was active/idle user rather than diseased/nondiseased.] If p = 0.15 and n = 5, what is the expected number of tests using this procedure? (Round your answer to three decimal places.)
Use the empirical rule (68 - 95 - 99.7%) to estimate the probability of a gorilla living longer than 14.3
years.
Percent % pls
Answers
the probability of a gorilla living longer than 14.3 years is 83.9%
Given :
The lifespans of gorillas in a particular zoo are normally distributed
Mean is 16 years and standard deviation is 1.7 years
Empirical rule diagram is attached below
We need to find the probability of a gorilla living longer than 14.3
Lets find out 14.3 lies in which standard deviation on left or right
mean is 16
14.3 lies on first standard deviation on left of mean 16
So we find out the area that covers after 14.3
The area after 14.3 is
the probability of a gorilla living longer than 14.3 years is 83.9%
Learn more : brainly.com/question/14280851
Final answer:
The probability of a gorilla living longer than 14.3 years is estimated to be 81.2% using the empirical rule.
Explanation:
To estimate the probability of a gorilla living longer than 14.3 years, we can use the empirical rule, also known as the 68-95-99.7% rule. According to this rule, for a normal distribution, approximately 68% of the data falls within one standard deviation of the mean, 95% falls within two standard deviations, and 99.7% falls within three standard deviations.
The average lifespan of gorillas in this zoo is 16 years, with a standard deviation of 1.7 years. To estimate the probability of a gorilla living longer than 14.3 years, we need to calculate the z-score. The z-score formula is:
z = (x - μ) / σ
where x is the value we want to find the probability for, μ is the mean, and σ is the standard deviation.
Plugging in the values, we have:
z = (14.3 - 16) / 1.7
Solving this, we get a z-score of -0.88. Using a z-table or a calculator, we can find that the probability of a gorilla living longer than 14.3 years is approximately 0.812, or 81.2%.
Learn more about Estimating probability here:
#SPJ12
Answers
X = -1/2 , 3
Since it’s asking for the length, X would not be negative.
RS = 4X = 4*3 = 12
Answer:
I think it may be a but I am not completely sure
Step-by-step explanation:
Answers
Answer:
12,924
Step-by-step explanation:
76x168= 12,768
and...
69+87= 156
nowweaddthemtogether...
12,768+156=12,924
Hopethishelpedyou-haveagooddaybrocya)
What is the perimeter of ABCD?
Answers
Answer:
12.5cm
Step-by-step explanation:
(5x2) + (1.25x2) =12.5
I multiplied by 2 because one side will be equal to another.
Answers
Answers
Answer:
It will take them approximately 51.43 minutes to complete the project together
Step-by-step explanation:
This is what is called a "shared job" problem.
The best way to work on them is to start by finding the "portion" of the job done by each of the people in the unit of time.
So, for example, Sarah completes the project in 90 minutes, so in the unit of time (that is 1 minute) she completed 1/90 of the total project
Betty completes the project in 120 minutes, so in the unit of time (1 minute) she completes 1/120 of the total project.
We don't know how long it would take for them to complete the project when working together, so we call that time "x" (our unknown).
Now, when they work together completing the entire job in x minutes, in the unit of time they would have done 1/x of the total project.
In the unite of time, the fraction of the job done together (1/x) should equal the fraction of the job done by Sarah (1/90) plus the fraction of the job done by Betty. This in mathematical form becomes:
So it will take them approximately 51.43 minutes to complete the project together.