BUSINESS COLLEGE

Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Emma deposited $500 in a savings account at her bank. Her account will earn an annual simple interest rate of 9%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 11 years

Answers

Answer 1

Answer:

$995.00

Explanation:

Calculation for how much money will she have in her account in 11 years

Using this formula

Future Value = Present Value + Present Value * Interest Rate ×Time Period

Let plug in the formula

Future Value = $500 + $500 ×0.09 × 11

Future Value =$500+$495

Future Value = $995.00

Therefore the amount of money she will have in her account in 11 years will be $995.00

Answer 2

Answer:

Final answer:

Emma will have $995 in her savings account after 11 years with a fixed interest rate of 9%.

Explanation:

To calculate how much money Emma will have in her savings account after 11 years with a fixed interest rate of 9%, we can use the formula:

Future Value = Principal + (Principal * Interest Rate * Time)

Substituting the values, we get:

Future Value = $500 + ($500 * 0.09 * 11) = $500 + $495 = $995

Therefore, Emma will have $995 in her account after 11 years.

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Related Questions

Which of the following statements is FALSE?A. MMProposition1, if there are no taxes, states the value of the firm does not depend whatsoever on itscapital structure.B. MM Proposition 2, if there are no taxes, explains how the cost of equity decreases as the firm increasesits use of debt financing.C. Because interest expense is tax deductible, leverage increases the firm's value by the amount of thepresent value of the interest tax shield.D. Because interest expense is tax deductible, a firm's WACC decreases as firms rely more heavily on debt financing.
Kirby just inherited $250,000. He would like to hire a financial advisor to provide financial advice and to manage the inheritance. Kirby has interviewed two potential advisors. The first person indicated that he would not charge for his advice but would charge a 4.50% commission on any mutual funds purchased when managing the $250,000. The second person indicated that she would charge $2,500 to write a financial plan and 1% of any asset she manages. Which advisor should Kirby choose if he wants the $250,000 managed and is interested in minimizing his upfront expenses?A. The first advisor because there is no planning fee.B. The second advisor because the total first-year cost is $5,000.C. The first advisor because the total first-year cost is $5,000.D. Because the cost is approximately the same, either advisor could be selected.
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The manufacturing overhead budget at Rost Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 2,800 direct labor-hours will be required in September. The variable overhead rate is $7.00 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $43,120 per month, which includes depreciation of $3,640. All other fixed manufacturing overhead costs represent current cash flows. The September cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:

Answers

Answer:

Total overhead cash disbursement= $59,080

Explanation:

Giving the following information:

Estimated direct labor hours= 2,800

The variable overhead rate is $7.00 per direct labor-hour.

Estimated fixed manufacturing overhead= $43,120 per month

Includes depreciation of $3,640

To calculate the cash disbursement, we need to deduct from the fixed manufacturing overhead the depreciation expense because it is not a cash disbursement.

Variable overhead= 7*2,800= 19,600

Fixed overhead= 43,120-3,640= 39,480

Total overhead cash disbursement= $59,080

Starset, Inc., has a target debt-equity ratio of 1.15. Its WACC is 8.6 percent, and the tax rate is 21 percent.Required:
a. If the company's cost of equity is 14 percent, what is its pretax cost of debt?
b. If instead you know that the aftertax cost of debt is 6.1 percent, what is the cost of equity?

Answers

Answer:

a. 4.94%

b. 11.48%

Explanation:

Here in this question, we are interested in calculating the pretax cost of debt and cost of equity.

We proceed as follows;

a. From the question;

The debt equity ratio = 1.15

since Equity = 1 ; Then

Total debt + Total equity = 1 + 1.15 = 2.15

Mathematically ;

WACC = Cost of equity x Weight of equity + Pretax Cost of debt x Weight of debt x (1-Tax rate)

Where WACC = 8.6%

Cost of equity = 14%

Weight of equity = 1/(total debt + total equity) = 1/(1+1.15) = 1/2.15

Pretax cost of debt = ?

Weight of debt = debt equity ratio/total cost of debt = 1.15/2.15

Tax rate = 21% = 0.21

Substituting these values, we have;

8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)

Pretax cost debt = (8.6%-6.511628%)/(1.15/2.15 x (1-21%))

Pretax cost of debt = 4.94%

b. WACC = Cost of equity x Weight of equity + After tax Cost of debt x Weight of debt

8.6% = Cost of equity x 1/2.15 + 6.1% x 1.15/2.15

Cost of equity = (8.6%-3.26279%)/(1/2.15)

Cost of equity = 11.48%

During the first year of operation, 2018, McGinnis Appliance recognized $340,000 of service revenue on account. At the end of 2018, the accounts receivable balance was $66,836. Even though this is his first year in business, the owner believes he will collect all but about 5 percent of the ending balance. Required What amount of cash was collected by McGinnis during 2018

Answers

Answer:

$273,164

Explanation:

Data given in the question

Recognized amount of service revenue = $340,000

And, the account receivable balance is $66,836

So, by considering the above information, the amount of cash collected is

= Recognized amount of service revenue - the account receivable balance

= $340,000 - $66,836

= $273,164

By deducting the account receivable balance from the service revenue recognized amount we can get the cash collected amount

Steve Jobs has achieved a great deal of success. What are some possible negative consequences of the level of power that he holds?

Answers

People can claim his work or inventions as their own.

Every organization needs some degree of flexibility and standardization. True False Being overly committed to following rules can harm an organization and keep it from growing. True False Every organization needs either a degree of ________ to adapt to new situations or some degree of ________ to make routine tasks and decisions as efficient and effective as possible. standardization; flexibility culture; vision flexibility; standardization structure; design

Answers

Answer:

1. True: Every organization needs some degree of flexibility and standardization.

2. True: Being overly committed to following rules can harm an organization and keep it from growing.

3. flexibility; standardization.

Explanation:

It is really important and necessary that all organization have some degree of flexibility and standardization. Every organization is expected to be flexible, in order to be able to effectively manage potential changes or challenges that arises in business. They should also be standardized, by having proper policies, strategies and structure for the purpose of running the business smoothly and efficiently.

However, if an organization is overly committed to following rules, this can cause harm to it's business operations and thereby hindering its growth and development.

Hence, some degree of flexibility is needed in every organization in order to adapt to new situations or some degree of standardization to make routine tasks and decisions as efficient and effective as possible.

What role should government play in a free market economy?

Answers

Economists, however, identify six major functions of governments in market economies. Governments provide the legal and social framework, maintain competition, provide public goods and services, redistribute income, correct for externalities, and stabilize the economy.

Answer: Stabilize the economy

Explanation:

Other Questions

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Edward leaves an organization for three years to fulfill military duties. Which observation is true of his employer's obligation to reemploy Edward under the Uniformed Services Employment and Reemployment Rights Act?A) The employer is not obligated to reemploy Edward.B) The employer must reemploy Edward with the same seniority and status he would have earned if his employment had not been interrupted.C) The employer must reemploy Edward but is exempted from providing him any fringe benefits or retirement benefits.D) The employer must implement an early retirement incentive program for Edward.E) The employer must reemploy Edward with a lower pay scale to compensate for his absence.

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