Question

138 and is used. 24.22%. 19 $33500 is deposited in a savings account at the end of each year and the account pays interest of 5% compounded annually, what will be the balance of the account at the end of 10 years? $351750 O $421360 O $486750 O $54568

Answer 1

Answer to Question 138:

Cost of Machine = $256,000
Salvage Value = $0
Useful Life = 8 years

Annual Depreciation = (Cost of Machine - Salvage Value) / Useful Life
Annual Depreciation = ($256,000 - $0) / 8
Annual Depreciation = $32,000

Annual Net Income = Annual Revenue - Annual Operating Expenses - Annual Depreciation
Annual Net Income = $100,000 - $38,000 - $32,000
Annual Net Income = $30,000

Annual Rate of Return = Annual Net Income / Initial Investment
Annual Rate of Return = $30,000 / $256,000
Annual Rate of Return = 11.72%

Answer to Question 19:

Annual Deposit = $33,500
Number of Deposits = 10
Annual Interest Rate = 5%

Accumulated Sum = $33,500*1.05^9 + $33,500*1.05^8 + ... + $33,500*1.05 + $33,500
Accumulated Sum = $33,500 * (1.05^10 - 1) / 0.05
Accumulated Sum = $33,500 * 12.5779
Accumulated Sum = $421,360