Acceso
Prima
Hogar Banco de preguntas Ciencias económicas
Pregunta
upstudy study bank question image url

ssignment
(Related to Checkpoint 5.4 ) (Comparing present and future values) You are offered today or in 14 years. Assuming that you can earn 15 percent on your money, which should
you choose?
If you are offered in 14 years and you can earn 15 percent on your money, what is the present value of ? of 20 points
(Round to the nearest cent.)

Ask by Vargas Johnson. in the United States
Jan 01,2025

Solución de inteligencia artificial de Upstudy

Respuesta verificada por el tutor

Responder

The present value of $360,000 in 14 years at a 15% interest rate is $50,869.00.

Solución

To determine whether you should take $100,000 today or $360,000 in 14 years with an annual interest rate of 15%, we’ll calculate the present value (PV) of $360,000 received in the future. This will allow you to compare both options on an equal footing.

Present Value Calculation

The formula for present value is:
Where:
  • (Future Value)
  • (Annual Interest Rate)
  • years (Number of Periods)
Plugging in the values:
First, calculate :
Now, compute the present value:

Comparison of Options

  • Option 1: Receive $100,000 today.
  • Option 2: Receive $360,000 in 14 years, which is equivalent to approximately $50,869 today.
Since $100,000 (Option 1) is greater than $50,869 (Option 2), it is financially advantageous to choose the $100,000 today.

Final Answer

The present value of $360,000 in 14 years at a 15% interest rate is $50,869.00.

Respondido por UpStudy AI y revisado por un tutor profesional

error msg
Explicar
Simplifique esta solución

Extra Insights

To find the present value (PV) of in 14 years at an interest rate of 15%, you can use the present value formula:
where:
  • = future value ($360,000)
  • = interest rate (15% or 0.15)
  • = number of years (14)
Now, plugging in the values:
So, the present value of in 14 years is approximately .
Now, to determine which option is better, you have today and a present value of for the future amount. Since is greater than , you should choose today.

preguntas relacionadas

The cost of goods sold for Home Depot last year amounted to $3,530,800 and the average inventory at cost was $1,$74,182. The published inveriory turnover at cost is 5,2 . Calculate the inventory turnover at cost, and if it is less than the published rate, calculate the target average inventory at cost. Select one: a. $302,727 b. $679,000 (c. $490,864 (d. $981,727
Ciencias económicas United States Mar 31, 2025
In the past, the United States exported more goods and services than it imported. However, since 1975 it has bought more goods from other nations than it has sold and thus has a trade deficit. Over the past few years, the United States ran its highest trade deficits with China. Still the United States remains one of the world's largest exporting nations even though the U.S. exports a much lower percentage of its products than other countries, such as China, Japan and Germany. Improving that percentage by expanding exports is a goal the U.S. hopes to achieve by 2015 . Source: William Nickels, et al. Understanding Business, 10e. (i) Instructions Goods exported from the U.S. used to be more numerous than those imported into this country. But starting in 1975, the U.S. has had a trade deficit, especially with China in recent years. However, even though the U.S. exports a relatively low percentage of its goods, it is still among the most prolific exporters in the world, and the quality of its exports is unsurpassed. By 2015, the U.S. would like to export a larger percentage of its goods in order to become an even more influential world superpower (Nickels et al., 2014).
Ciencias económicas United States Mar 31, 2025
40-year-old man in the U.S. has a 0.243% risk of dying during the next year. An insurance company charges $260 per ear for a life-insurance policy that pays a $100,000 death benefit. What is the expected value for the person buying the nsurance? Round your answer to the nearest dollar. Expected Value: $−37.00 for the year
Ciencias económicas United States Mar 31, 2025
\begin{tabular}{l|l}\multicolumn{1}{l}{ A variable that can't be accounted for is } & The author backs up the statement that the economy \\ can be unpredictable by pointing out that \\ a natural disaster such as a hurricane. As the & result of a hurricane, demand is guaranteed \\ to increase in a way that could not have been & (A) banking panics occur when confidence in the financial \\ system is strong. \\ predicted because the flow of goods into & (B) natural disasters can affect the demand for goods and \\ disrupt production. \\ impacted areas is blocked. If crops or power \\ facilities like oil refineries are damaged, then & C. customers are more willing to buy something when \\ interest rates are low. \\ demand is also affected. & (D) inflation occurs when prices for goods and services \\ decrease too quickly. \end{tabular}
Ciencias económicas United States Mar 31, 2025
/ Chapter 5 - Elasticity / 5.1: Calculating Demand and Supply Elasticity 5.1: Calculating Demand and Supply Elasticity ion 3 mplete d out of 9 ion Price: $4.0 Short-Term Demand Price $6.28.8 million units Answer: ◻ Check
Ciencias económicas Canada Mar 31, 2025

Latest Economics Questions

/ Chapter 5 - Elasticity / 5.1: Calculating Demand and Supply Elasticity 5.1: Calculating Demand and Supply Elasticity ion 3 mplete d out of 9 ion Price: $4.0 Short-Term Demand Price $6.28.8 million units Answer: ◻ Check
Ciencias económicas Canada Mar 31, 2025
why is it helpful to a Roth Ira? is money saved in the bank Is a retirement plan, where money grows, and that is tax free by the age of 59.5
Ciencias económicas United States Mar 31, 2025
\begin{tabular}{l|l}\multicolumn{1}{l}{ A variable that can't be accounted for is } & The author backs up the statement that the economy \\ can be unpredictable by pointing out that \\ a natural disaster such as a hurricane. As the & result of a hurricane, demand is guaranteed \\ to increase in a way that could not have been & (A) banking panics occur when confidence in the financial \\ system is strong. \\ predicted because the flow of goods into & (B) natural disasters can affect the demand for goods and \\ disrupt production. \\ impacted areas is blocked. If crops or power \\ facilities like oil refineries are damaged, then & C. customers are more willing to buy something when \\ interest rates are low. \\ demand is also affected. & (D) inflation occurs when prices for goods and services \\ decrease too quickly. \end{tabular}
Ciencias económicas United States Mar 31, 2025
In the past, the United States exported more goods and services than it imported. However, since 1975 it has bought more goods from other nations than it has sold and thus has a trade deficit. Over the past few years, the United States ran its highest trade deficits with China. Still the United States remains one of the world's largest exporting nations even though the U.S. exports a much lower percentage of its products than other countries, such as China, Japan and Germany. Improving that percentage by expanding exports is a goal the U.S. hopes to achieve by 2015 . Source: William Nickels, et al. Understanding Business, 10e. (i) Instructions Goods exported from the U.S. used to be more numerous than those imported into this country. But starting in 1975, the U.S. has had a trade deficit, especially with China in recent years. However, even though the U.S. exports a relatively low percentage of its goods, it is still among the most prolific exporters in the world, and the quality of its exports is unsurpassed. By 2015, the U.S. would like to export a larger percentage of its goods in order to become an even more influential world superpower (Nickels et al., 2014).
Ciencias económicas United States Mar 31, 2025
Prepaid expenses at the beginning of the year relates to security fees that was paid in the previous financial year. As per the contract with ADL, security fees are payable half yearly in advance on 1 July and 1 January respectively. The security fee contract also makes provision for an annual increase on 1 July of 15% of the monthly premium.
Ciencias económicas South Africa Mar 31, 2025
Anterior Próximo
¡Prueba Premium ahora!
¡Prueba Premium y hazle a Thoth AI preguntas de matemáticas ilimitadas ahora!
Quizas mas tarde Hazte Premium
Estudiar puede ser una verdadera lucha
¿Por qué no estudiarlo en UpStudy?
Seleccione su plan a continuación
Prima

Puedes disfrutar

Empieza ahora
  • Explicaciones paso a paso
  • Tutores expertos en vivo 24/7
  • Número ilimitado de preguntas
  • Sin interrupciones
  • Acceso completo a Respuesta y Solución
  • Acceso completo al chat de PDF, al chat de UpStudy y al chat de navegación
Básico

Totalmente gratis pero limitado

  • Solución limitada
Bienvenido a ¡Estudia ahora!
Inicie sesión para continuar con el recorrido de Thoth AI Chat
Continuar con correo electrónico
O continuar con
Al hacer clic en "Iniciar sesión", acepta nuestros términos y condiciones. Términos de Uso & Política de privacidad
Pop-up title
Lorem ipsum dolor sit amet, te everti debitis assentior nam, ne illum utroque principes sed. Ridens phaedrum an vix, qui in dolore appareat.