whereas Second City Bank pays 8 percent interest compounded annually.

A disadvantage of the high-low method of cost analysis
July 16, 2021
c. Maximize the wealth of all stakeholders if the firm wants to continue to exist.
July 16, 2021

whereas Second City Bank pays 8 percent interest compounded annually.

whereas Second City Bank pays 8 percent interest compounded annually.

You are scheduled to receive $15,500 in three years. When you receive it, you will invest it for seven more years at 7.2 percent per year. How much will you have in ten years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)

 

Future Value:

 

2.)    Rust Bucket Motor Credit Corporation (RBMCC), a subsidiary of Rust Bucket Motor, offered some securities for sale to the public on March 28, 2008. Under the terms of the deal, RBMCC promised to repay the owner of one of these securities $100,000 on March 28, 2039, but investors would receive nothing until then. Investors paid RBMCC $23,099 for each of these securities; so they gave up $23,099 on March 28, 2008, for the promise of a $100,000 payment 31 years later.

 

a. Based on the $23,099 price, what rate was RBMCC paying to borrow money? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Rate of Return% =

 

b. Suppose that, on March 28, 2018, this securityAf?cA????1A????1s price is $41,380. If an investor had purchased it for $23,099 at the offering and sold it on this day, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

Annual rate of return % =

c. If an investor had purchased the security at market on March 28, 2018, and held it until it matured, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

Annual rate of return %=

 

 

3.)    At 6.90 percent interest, how long does it take to double your money? (Round your answer to 2 decimal places. (e.g., 32.16))

 

Length of time _____ years

 

At 6.90 percent interest, how long does it take to quadruple it? (Round your answer to 2 decimal places. (e.g., 32.16))

 

Length of time ______ years

4.)    First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually.

 

If you made a $65,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 8 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

 

Difference in accounts $

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