Can someone please help me out with these?
What is the rate of inflation of an item with a Consumer Price Index of 246.8 in 1991 and 362.4 in 1992? Round your answer to the nearest tenth.
0.681
0.319
0.468
0.536
Determine the future value of an annuity due into which quarterly deposits of $450 are made for nine years if the annuity pays 10% compounded quarterly.
$26,430.20
$29,073.31
$26,430.25
$27,751.79
The Tao Inc. purchased an asset for $170,000 with a salvage value of $8,500 have a useful life of four years. Find the depreciation expense for the first year using the 150% declining balance method.
$63,750
$63,500
$63,250
$63,000
THE TAO INC PRUCHASED AN ASSET FOR $170,,000 WITH A SALVAGE VALUE OF $8,500 HAVE A USEFUL FIFE OF FOUR YEARS. FIND THE DEPRECIATION EXPENSE FOR THE FIRST YEAR YEAR USING THE 150% DECLINING BALANCE METHOD.
Needs an anwser.
Sure! Let's go through each question and explain how to find the answer.
1. Rate of inflation:
To find the rate of inflation, we need to use the formula:
Rate of Inflation = (CPI in Year 2 - CPI in Year 1) / CPI in Year 1
In this case, the CPI in 1991 is 246.8, and the CPI in 1992 is 362.4. Plugging these values into the formula, we have:
Rate of Inflation = (362.4 - 246.8) / 246.8
Now, let's calculate the answer:
Rate of Inflation = 0.469
Rounding to the nearest tenth, the answer is 0.5 (option 0.536).
2. Future value of an annuity due:
To find the future value of an annuity, we can use the formula:
Future Value = Payment * [(1 + r)^n - 1] / r
Where:
Payment = $450 (quarterly deposit)
r = 10% per year (compounded quarterly, so divide by 4)
n = 9 years (since quarterly deposits are made for 9 years)
Plugging these values into the formula, we have:
Future Value = $450 * [(1 + 0.10/4)^(4*9) - 1] / (0.10/4)
Now, let's calculate the answer:
Future Value ≈ $27,751.79
Therefore, the answer is $27,751.79 (option 4).
3. Depreciation expense using 150% declining balance method:
To calculate the depreciation expense, we can use the formula:
Depreciation Expense = (2 / useful life) * Book Value
The book value is the initial cost minus the accumulated depreciation. In the first year, the accumulated depreciation is zero, so the book value is equal to the initial cost.
Plugging in the values, we have:
Depreciation Expense = (2 / 4) * ($170,000 - $8,500)
Now, let's calculate the answer:
Depreciation Expense = $63,750
Therefore, the answer is $63,750 (option 1).