NEED HELP IMMEDIATELY, HAVE UNTIL 10P.M. CENTRAL TO HAVE ANSWERS??
1.Determining the Future Value of Education. Jenny Franklin estimates that as a result of completing her master’s degree, she will earn $6,000 a year more for the next 40 years.
a.What would be the total amount of these additional earnings? $240,000
b.What would be the future value of these additional earnings based on an annual interest rate of 6 percent?
Calculating Future Value of Salary. During a job interview, Pam Thompson is offered a salary Of 23,000. The company gives annual raises of 6 percent. What would be Pam’s salary
during her fifth year on the job?
Computing Future Value. Calculate the future value of a retirement account in which you deposit $2,000 a year for 30 years with an annual interest rate of 8 percent.
b. Future value of an asset with interest compounded annually, (you didn't mention how to compound)
n = number of years
R = rate
FV = Original investment * ((1 + R)^n)
Cal. Future value of salary, 6%/year
1st year--23,000
2nd year---23,000 + 1,380 = 24,380
3rd year---24,380 + 1,463 = 25,843
4th year---25,843 + 1,551 = 27,394
5th year---27,394 + 1,644 = 29,038
Above is cal. with 6% simple interest per year, not FV formulas.
Cal. FV retirement acct., dep. $2000/per year for 30 yrs, annual rate 8%--compounded annually (You didn't mention how to compound)
n = number of years
R = rate
FV = Original investment * ((1 + R)^n)
FV = 2000 * (1 + .08)^30)
FV = 2000 * (1.08)^30
FV = 2000 * (10.0627)
FV = ?
in 2000, selected new automobiles had an average cost of $16,000. The average cosst of those same motor vehicles is now $28,000. What was the rate of increase for this item between the two time period?
20,1254
During a job interview, Pam Thompson is offered a salary of $50,000. The company gives annual raises of 12 percent. What would be Pam’s salary during her fifth year on the job?
To determine the future value of these scenarios, we can use the concept of compound interest. Compound interest is the interest earned on both the initial investment and any accumulated interest from previous periods.
1. Future Value of Additional Earnings:
a. The total amount of these additional earnings can be calculated by multiplying the annual additional earnings ($6,000) by the number of years (40).
Total additional earnings = $6,000 * 40 = $240,000.
b. To calculate the future value of these additional earnings based on an annual interest rate of 6 percent, we can use the formula for compound interest:
Future Value = Present Value * (1 + interest rate)^number of periods.
In this case, the present value is the total additional earnings ($240,000), the interest rate is 6 percent (0.06), and the number of periods is 40.
Future Value = $240,000 * (1 + 0.06)^40 = $1,461,244.13.
Therefore, the future value of these additional earnings based on an annual interest rate of 6 percent would be $1,461,244.13.
2. Salary during Pam Thompson's fifth year on the job:
Pam Thompson's initial salary is $23,000. Since the company provides annual raises of 6 percent, her salary for each subsequent year can be calculated using the formula:
Future Salary = Present Salary * (1 + raise percentage)^number of years.
In this case, the present salary is $23,000, the raise percentage is 6 percent (0.06), and the number of years is 5.
Future Salary = $23,000 * (1 + 0.06)^5 = $30,854.18.
Therefore, Pam's salary during her fifth year on the job would be $30,854.18.
3. Future Value of Retirement Account:
To calculate the future value of a retirement account, we can use the formula for compound interest again.
The annual deposit is $2,000, the annual interest rate is 8 percent (0.08), and the number of years is 30.
Future Value = $2,000 * [(1 + 0.08)^30 - 1] / 0.08 = $227,368.91.
Therefore, the future value of the retirement account with an annual deposit of $2,000 for 30 years and an annual interest rate of 8 percent would be $227,368.91.
Remember, these calculations can be done using a financial calculator, spreadsheet software, or online financial calculators, which will save you time and provide accurate results.