Given $125,000 in total liabilities and $100,000 in total assets, what is the net worth?(1 point) Responses −$15,000 negative 15,000 dollars −$25,000 negative 25,000 dollars $225,000 $225,000 $25,000
The net worth can be calculated by subtracting the total liabilities from the total assets.
Net Worth = Total Assets - Total Liabilities
Net Worth = $100,000 - $125,000
Therefore, the net worth is -$25,000 negative 25,000 dollars.
Gina loaned Gerry $300 at an interest rate of 10 percent a year. How much interest will Gina get if Gerry pays Gina after 6 months?(1 point)
To find the interest, we can use the formula for simple interest:
Simple Interest = Principal x Rate x Time
Given:
Principal (loan amount) = $300
Rate = 10% = 0.1 (in decimal form)
Time = 6 months = 0.5 years (since the interest is calculated semi-annually)
Plugging in these values into the formula, we get:
Simple Interest = $300 x 0.1 x 0.5
Simple Interest = $15
Therefore, Gina will get a total interest of $15.
Calculate the simple interest on a $100,000 investment at an interest rate of 12 percent a year after 6 months.(1 point) Responses $6,000 $6,000 $72,000 $72,000 $600,000 $600,000 $7,200,000
To calculate the simple interest, we can use the formula:
Simple Interest = Principal x Rate x Time
Given:
Principal (investment amount) = $100,000
Rate = 12% = 0.12 (in decimal form)
Time = 6 months = 0.5 years
Plugging in these values into the formula, we get:
Simple Interest = $100,000 x 0.12 x 0.5
Simple Interest = $6,000
Therefore, the simple interest on a $100,000 investment at an interest rate of 12% a year after 6 months is $6,000.
Find the value after five years of a $3,000 savings account that pays 3% interest compounded yearly. Round the answer to two decimal places.(1 point) $
To find the value of the savings account after five years with annual compounding, we can use the formula for compound interest:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount (value after five years)
P = the principal amount (initial amount)
r = the interest rate
n = the number of times interest is compounded per year
t = the number of years
Given:
P = $3,000
r = 3% = 0.03 (in decimal form)
n = 1 (compounded yearly)
t = 5 years
Plugging in these values into the formula, we get:
A = $3,000(1 + 0.03/1)^(1*5)
A = $3,000(1 + 0.03)^5
A = $3,000(1.03)^5
A ≈ $3,000(1.159274)
A ≈ $3,477.82
Therefore, the value of the savings account after five years with a $3,000 principal and a 3% interest rate compounded yearly is approximately $3,477.82 (rounded to two decimal places).
Find the balance after 10 years of a $30,000 savings account that pays 10% interest compounded yearly.(1 point) Responses $112,070.90 $112,070.90 $2,245,256.05 $2,245,256.05 $77,812.27 $77,812.27 $33,154.81
To find the balance after 10 years with annual compounding, we can use the formula for compound interest:
A = P(1 + r/n)^(n*t)
Where:
A = the final amount (balance after 10 years)
P = the principal amount (initial amount)
r = the interest rate
n = the number of times interest is compounded per year
t = the number of years
Given:
P = $30,000
r = 10% = 0.10 (in decimal form)
n = 1 (compounded yearly)
t = 10 years
Plugging in these values into the formula, we get:
A = $30,000(1 + 0.10/1)^(1*10)
A = $30,000(1 + 0.10)^10
A = $30,000(1.10)^10
A ≈ $30,000(2.593742)
A ≈ $77,812.27
Therefore, the balance after 10 years of a $30,000 savings account that pays 10% interest compounded yearly is approximately $77,812.27.
Aria is investing $6,700 of her savings from her summer job for her college fund. She is planning to invest the amount for 3 years and can choose between simple interest at 6.5% and compound interest at 6%. Find the difference between the two interest earning types to help Aria decide which investing option is best for her.(1 point) Responses Aria should invest with 6% compound interest because it will result in $73.81 more in interest earnings. Aria should invest with 6% compound interest because it will result in $73.81 more in interest earnings. Aria should invest with 6.5% simple interest because it will result in $26.69 more in interest earnings. Aria should invest with 6.5% simple interest because it will result in $26.69 more in interest earnings. Aria should invest with 6.5% simple interest because it will result in $187.26 more in interest earnings. Aria should invest with 6.5% simple interest because it will result in $187.26 more in interest earnings. Aria should invest with 6% compound interest because it will result in $86.76 more in interest earnings.
To compare the two interest earning types and determine which option is best for Aria, we can calculate the interest earnings for each.
For simple interest:
Principal (investment amount) = $6,700
Interest rate = 6.5% = 0.065 (in decimal form)
Time = 3 years
Simple interest earnings = Principal x Rate x Time
Simple interest earnings = $6,700 x 0.065 x 3
Simple interest earnings = $1,304.50
For compound interest:
Principal (investment amount) = $6,700
Interest rate = 6% = 0.06 (in decimal form)
Time = 3 years
Compound interest earnings can be calculated using the formula we discussed before:
A = P(1 + r/n)^(nt)
Where:
A = the final amount (balance after 3 years)
P = the principal amount (initial amount)
r = the interest rate
n = the number of times interest is compounded per year
t = the number of years
A = $6,700(1 + 0.06/1)^(1*3)
A = $6,700(1 + 0.06)^3
A = $6,700(1.06)^3
A ≈ $6,700(1.191016)
A ≈ $7,991.08
Compound interest earnings = Final amount - Principal
Compound interest earnings = $7,991.08 - $6,700
Compound interest earnings = $1,291.08
To find the difference in interest earnings between the two options, we subtract the simple interest earnings from the compound interest earnings:
Difference = Compound interest earnings - Simple interest earnings
Difference = $1,291.08 - $1,304.50
Difference ≈ -$13.42
Therefore, the difference between the two interest earning types is approximately -$13.42. This means that with the given values, investing with 6.5% simple interest would result in slightly higher interest earnings compared to investing with 6% compound interest.