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anonymous

  • one year ago

Khloe has a savings account that earns 3.13% compounded monthly. If she has $2,378 in the account today, what will the account balance be in 11 years? $2,447.13 $2,452.43 $3,337.70 $3,353.86

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  1. anonymous
    • one year ago
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    @jim_thompson5910 @phi

  2. jim_thompson5910
    • one year ago
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    Use FV = PV*(1+r/n)^(n*t) where FV = unknown PV = 2378 r = 0.0313 n = 12 (compounded 12 times a year) t = 11 years

  3. phi
    • one year ago
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    any luck? Jim wrote it out (like setting the dinner table. Now serve the dinner), that is put in the numbers. You will want to use a calculator.

  4. anonymous
    • one year ago
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    Xavier deposits $6 daily into an interest-bearing account to save for renovations to his bathroom. The account earns 4.57% which compounds annually. What is the present value of the investment if Xavier renovates his bathroom in five years? $11,785.32 $10,033.83 $7,843.83 $9,595.32 @jim_thompson5910

  5. jim_thompson5910
    • one year ago
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    are you familiar with annuities at all?

  6. anonymous
    • one year ago
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    yes

  7. anonymous
    • one year ago
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    But I am not sure whether to use PVOA or PVAD

  8. jim_thompson5910
    • one year ago
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    PVOA = present value of ordinary annuity PVAD = present value of annuity due

  9. jim_thompson5910
    • one year ago
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    they're basically the same but the annuity due is where the payment is made at the beginning of the period (eg: rent)

  10. anonymous
    • one year ago
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    Yeah I know what they are but I am not which one to use in this scneario

  11. jim_thompson5910
    • one year ago
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    in this case, you use PVOA because the payment is made at the end of the period

  12. anonymous
    • one year ago
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    oh ok

  13. anonymous
    • one year ago
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    So I am trying to figure out how would I plug in the values

  14. anonymous
    • one year ago
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    Because Xavier is depositing 6 dollars daily

  15. jim_thompson5910
    • one year ago
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    hint: assume 365 days in a year (6 dollars per day) * (365 days per year) = 6*365 = 2190 dollars per year

  16. jim_thompson5910
    • one year ago
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    if the payment frequency doesn't match with the compounding frequency, that is your first goal: to get them to line up somehow

  17. jim_thompson5910
    • one year ago
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    so instead of thinking "6 dollars per day", think "2190 dollars per year" because the money is compounded annually

  18. anonymous
    • one year ago
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    would that be then used as the C in the equation

  19. jim_thompson5910
    • one year ago
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    yeah that's the cash flow C

  20. anonymous
    • one year ago
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    then the interest rate would be 0.0457/12 right?

  21. anonymous
    • one year ago
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    and 12 would be n right?

  22. jim_thompson5910
    • one year ago
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    the /12 part is only if you compound montly

  23. jim_thompson5910
    • one year ago
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    but we're actually compounding annually

  24. anonymous
    • one year ago
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    so????

  25. jim_thompson5910
    • one year ago
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    what formula are you using again? can you draw it out?

  26. anonymous
    • one year ago
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    |dw:1434671280661:dw|

  27. jim_thompson5910
    • one year ago
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    thanks

  28. anonymous
    • one year ago
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    your welcome

  29. jim_thompson5910
    • one year ago
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    So in this case, C = 2190 is deposited every year i = r/1 = 0.0457/1 = 0.0457 n = 1 (compounding frequency) t = 5 years

  30. jim_thompson5910
    • one year ago
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    \[\Large PVOA = C*\left(\frac{1}{i} - \frac{1}{i*(1+i)^{n*t}}\right)\] \[\Large PVOA = 2190*\left(\frac{1}{0.0457} - \frac{1}{0.0457*(1+0.0457)^{1*5}}\right)\] \[\Large PVOA = ???\]

  31. anonymous
    • one year ago
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    PVOA=9595.32

  32. jim_thompson5910
    • one year ago
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    I'm getting the same

  33. anonymous
    • one year ago
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    here is another one Adrian and Eva received a mortgage for $245,350 on a house that cost $266,100. They purchased 3 discount points and 2 origination points. What is the cost for the discount and origination points? discount points: $4,907.00; origination points: $7,360.50 discount points: $5,322.00; origination points: $7,903.00 discount points: $7,360.50; origination points: $4,907.00 discount points: $7,903.00; origination points: $5,322.00

  34. jim_thompson5910
    • one year ago
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    Discount points (see attached) http://www.investopedia.com/terms/d/discountpoints.asp

  35. jim_thompson5910
    • one year ago
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    origination points follow pretty much the same guideline http://www.investopedia.com/terms/o/originationpoints.asp

  36. anonymous
    • one year ago
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    with that do i have to calculate what it is

  37. jim_thompson5910
    • one year ago
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    yes you basically take 1% of the mortgage to get the cost of 1 point then multiply by 3 to get the cost of 3 points

  38. anonymous
    • one year ago
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    which would let to my answer?

  39. jim_thompson5910
    • one year ago
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    yeah you'll get to the answer by following those steps

  40. anonymous
    • one year ago
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    Jeremiah invested $1,200 in a Certificate of Deposit, $3,500 in a corporate bond, $900 in a common stock, and $2,475 in a preferred stock, The COD has a rate of return of 2.1%; the corporate bond is –1.3%; the common stock’s rate of return is 4.1%; and the preferred stock has a rate of return of 5.5%. What is the weighted mean, mean and median overall rate of return on Jeremiah’s investment portfolio? Weighted Mean: 1.9%; Mean: 2.6%; Median: 3.1% Weighted Mean: 1.9%; Mean: 3.3%; Median: 3.1% Weighted Mean: 2.6%; Mean: 1.9%; Median; 2.1% Weighted Mean: 2.6%; Mean 2.6%; Median: 2.1%

  41. anonymous
    • one year ago
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    I am completely lost on how to solve this one

  42. jim_thompson5910
    • one year ago
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    let me think

  43. anonymous
    • one year ago
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    ok

  44. jim_thompson5910
    • one year ago
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    Ok this isn't too bad. The most work will be done with the weighted mean, so we'll put that off til last

  45. jim_thompson5910
    • one year ago
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    to find the mean, you simply add up all the percentages and divide by 4 ignore the % signs

  46. anonymous
    • one year ago
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    when i added all of the rates and divided by 4 i got 6.275

  47. anonymous
    • one year ago
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    the rates of return

  48. jim_thompson5910
    • one year ago
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    2.1+(-1.3)+4.1+5.5 = 10.4 10.4/4 = 2.6

  49. jim_thompson5910
    • one year ago
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    do you see how I got that?

  50. anonymous
    • one year ago
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    oh yes yes i do

  51. anonymous
    • one year ago
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    ok so then from there we do what?

  52. jim_thompson5910
    • one year ago
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    so that's the mean rate of return 2.6%

  53. jim_thompson5910
    • one year ago
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    to find the median rate of return, sort the rates of return from smallest to biggest -1.3, 2.1, 4.1, 5.5 I dropped the percent signs to make things easier

  54. jim_thompson5910
    • one year ago
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    find the median of -1.3, 2.1, 4.1, 5.5

  55. anonymous
    • one year ago
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    so i add them together and basically divide again @jim_thompson5910

  56. jim_thompson5910
    • one year ago
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    with the median, you will look for the middle-most number

  57. jim_thompson5910
    • one year ago
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    if there are 2 numbers in the middle, add them up and divide by 2

  58. anonymous
    • one year ago
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    2.1+4.1=6.2/2=3.1

  59. anonymous
    • one year ago
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    right?

  60. anonymous
    • one year ago
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    @jim_thompson5910

  61. jim_thompson5910
    • one year ago
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    yep 3.1 is the median

  62. jim_thompson5910
    • one year ago
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    finally onto the weighted mean

  63. jim_thompson5910
    • one year ago
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    first add up all of the dollar figures invested: 1200+3500+900+2475 = 8075 a total of $8075 was invested

  64. jim_thompson5910
    • one year ago
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    what you do from here is multiply the portion invested as a fraction of the whole total investment by the rate of return example: for the Certificate of Deposit, (1200/8075)*2.1 = 0.31207430340558 another example: corporate bond (3500/8075)*(-1.3) = -0.56346749226007 do this for the other investment types does that make sense?

  65. anonymous
    • one year ago
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    oh ok

  66. jim_thompson5910
    • one year ago
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    tell me what you get

  67. anonymous
    • one year ago
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    -1.9

  68. anonymous
    • one year ago
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    @jim_thompson5910

  69. jim_thompson5910
    • one year ago
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    Certificate of Deposit, (1200/8075)*2.1 = 0.31207430340558 corporate bond (3500/8075)*(-1.3) = -0.56346749226007 common stock (900/8075)*4.1 = 0.45696594427244 preferred stock (2475/8075)*5.5 = 1.68575851393189 did you get this?

  70. anonymous
    • one year ago
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    um

  71. anonymous
    • one year ago
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    let me check

  72. anonymous
    • one year ago
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    ohhhhhh

  73. anonymous
    • one year ago
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    yes yes yes

  74. jim_thompson5910
    • one year ago
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    ok great

  75. jim_thompson5910
    • one year ago
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    now we add up the sub-results 0.31207430340558+(-0.56346749226007)+0.45696594427244+1.68575851393189 = 1.89133126934984

  76. jim_thompson5910
    • one year ago
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    1.89133126934984 rounds to 1.9

  77. jim_thompson5910
    • one year ago
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    So that's why the weighted mean is 1.9%

  78. anonymous
    • one year ago
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    Yup

  79. anonymous
    • one year ago
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    These next ones is just to check if the answer is correct @jim

  80. anonymous
    • one year ago
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    @jim_thompson5910

  81. anonymous
    • one year ago
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    Faith wants to retire in 35 years. She makes annual contributions to a Roth IRA in the amount of $3,950. She is taxed at 35% today, but anticipates that will change to 25% in her retirement. If the average annual rate of return on the account is 6.3%, what is the net value of Faith’s IRA account when she retires? $305,053.33 $351,984.61 $420,925.32 $434,750.32

  82. anonymous
    • one year ago
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    I put B

  83. jim_thompson5910
    • one year ago
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    one sec

  84. anonymous
    • one year ago
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    Jake and Kate made a down payment of 16% on a house that cost $267,450. They are charged an origination fee of 0.5%, an intangible tax of 0.2%, and bought two discount points. What did Jake and Kate pay in total for the down payment, fees, taxes, and points? $43,947.38 $47,285.16 $48,857.77 $50,013.15<----- my response

  85. jim_thompson5910
    • one year ago
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    the first one with faith is incorrect

  86. jim_thompson5910
    • one year ago
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    you will use a FVOA formula then apply the 35% tax

  87. anonymous
    • one year ago
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    Paige made a down payment of 12% on a home she purchased for $403,450 and financed the rest. What is the total cost of intangible taxes if her state charges 0.2% for intangible taxes? $484.14 $710.07 $806.90 $968.28<----- my response

  88. anonymous
    • one year ago
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    and ok

  89. anonymous
    • one year ago
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    Fifteen years ago, Asher bought four different stocks at their lowest price of the day. He purchased 57 shares of McDoe’s at $78 per share; 78 shares of Younger, Inc. cost him $23 per share; 90 shares of Alfa Goods went for $86 per share; and 64 shares of Hooper, Rex, and Co. had a price of $69 per share. Today, he sold all of his shares in each company. He received $5,313 for McDoe’s, with annual dividends of $12 per year, $2,776 for Younger, Inc, $9,657 for Alfa Goods, and $6,701 for Hooper, Rex, and Co. On which investment did Asher receive the greatest rate of return? McDoe’s<----- my response Younger, Inc. Alfa Goods Hooper, Rex, and Co

  90. anonymous
    • one year ago
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    are they wrong @jim_thompson5910

  91. jim_thompson5910
    • one year ago
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    I'm checking the Jake and Kate one

  92. jim_thompson5910
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    Jake and Kate made a down payment of 16% on a house that cost $267,450. They are charged an origination fee of 0.5%, an intangible tax of 0.2%, and bought two discount points. What did Jake and Kate pay in total for the down payment, fees, taxes, and points? $43,947.38 $47,285.16 $48,857.77 $50,013.15 -------------------------------------------- -------------------------------------------- Mortgage Amount = (1-0.16)*267450 = 224658 Down Payment: 0.16*267450 = 42792 Origination Fee: 0.005*224658 = 1123.29 Intangible Tax: 0.002*224658 = 449.316 Discount Points: 2*0.01*224658 = 4493.16 Add up the results: 42792+1123.29+449.316+4493.16 = 48,857.766 = 48,857.77 So Jake and Kate paid a total of $48,857.77

  93. anonymous
    • one year ago
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    and the other 2 @jim_thompson5910

  94. jim_thompson5910
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    Paige made a down payment of 12% on a home she purchased for $403,450 and financed the rest. What is the total cost of intangible taxes if her state charges 0.2% for intangible taxes? $484.14 $710.07 $806.90 $968.28 -------------------------------------------- -------------------------------------------- Downpayment: 0.12*403450 = 48,414 Mortgaged Amount: 403450-48414 = 355036 Intangible Taxes = 0.2% of mortgaged amount = 0.002*355036 = 710.072 = 710.07

  95. anonymous
    • one year ago
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    and the asher?

  96. jim_thompson5910
    • one year ago
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    still calculating that one

  97. anonymous
    • one year ago
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    ok

  98. jim_thompson5910
    • one year ago
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    Fifteen years ago, Asher bought four different stocks at their lowest price of the day. He purchased 57 shares of McDoe’s at $78 per share; 78 shares of Younger, Inc. cost him $23 per share; 90 shares of Alfa Goods went for $86 per share; and 64 shares of Hooper, Rex, and Co. had a price of $69 per share. Today, he sold all of his shares in each company. He received $5,313 for McDoe’s, with annual dividends of $12 per year, $2,776 for Younger, Inc, $9,657 for Alfa Goods, and $6,701 for Hooper, Rex, and Co. On which investment did Asher receive the greatest rate of return? McDoe’s Younger, Inc. Alfa Goods Hooper, Rex, and Co ------------------------------------------------ ------------------------------------------------ McDoe’s: bought 57 shares at $78 a share, so paid a total of 57*78 = $4,446 sold them to get $5,313 plus 12*15 = 180 dollars in dividends rate of return = (total revenue - total cost)/(total cost) = (5313+180 - 4446)/4446 = 0.23549257759784 Younger, Inc. bought 78 shares at $23 a share, total cost = 78*23 = 1,794 got $2,776 for selling them rate of return = (total revenue - total cost)/(total cost) = (2776-1794)/1794 = 0.5473801560758 Alfa Goods: bought 90 shares at $86 a share ----> total cost = 90*86 = 7740 sold them for $9657 rate of return = (total revenue - total cost)/(total cost) = (9657-7740)/7740 = 0.24767441860466 Hooper, Rex, and Co. bought 64 shares at $69 a share: total cost = 64*69 = 4416 sold them for $6,701 rate of return = (total revenue - total cost)/(total cost) = (6701-4416)/4416 = 0.5174365942029 ---------------------------------------- Summary of Rates of return McDoe’s: rate of return = 0.23549257759784 Younger, Inc. rate of return = 0.5473801560758 Alfa Goods: rate of return = 0.24767441860466 Hooper, Rex, and Co. rate of return = 0.5174365942029

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