A friend asks to borrow $55 from you and in return will pay you $58 in one
Question:
A friend asks to borrow $55 from you and in return will pay you $58 in one year. If your bank is offering a 6% interest rate on deposits and loans:
a. How much would you have in one year if you deposited the $55 instead?
b. How much money could you borrow today if you pay the bank $58 in one year?
c. Should you loan the money to your friend or deposit it in the bank?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 71% (14 reviews)
abc Plan You are presented with three alternative courses of action You could ...View the full answer
Answered By
OTIENO OBADO
I have a vast experience in teaching, mentoring and tutoring. I handle student concerns diligently and my academic background is undeniably aesthetic
4.30+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Corporate Finance questions
-
How much would you have to deposit in an account today to have $3000 in a five- year term deposit at maturity if interest is 7.75% compounded annually?
-
How much would you have to invest today to be able to withdraw $4,090 each month, for 25 months, (starting next month), if your investments earn 3.4% APR (compounded monthly)?
-
How much would you have to pay into an account at the end of every 6 months to accumulate $10 000 in eight years if interest is 3% compounded semi-annually?
-
10. A light cord is wrapped around a wheel, R = 0.10 m and rotational inertia I about its axis and is attached to mass, m = 2 kg, see about its fixed axis and the object accelerates downward, (take g...
-
How can the payroll module of an AIS be breached? What controls should be set up to help prevent this?
-
A consumer agency wants to estimate the proportion of all drivers who wear seat belts while driving. Assume that a preliminary study has shown that 76% of drivers wear seat belts while driving. How...
-
Set up T accounts and record each transaction in SE 5. Determine the balance of each account. Preparing a Trial Balance
-
The trial balance for ShirtCraft, Inc., at January 31 is shown as follows: During February the following transactions occurred: Feb. 1 Billed customers $2,500 for services rendered. 1 Paid $150...
-
Decision on Accepting Additional Business Talladega Tire and Rubber Company has capacity to produce 5 0 0 , 0 0 0 tires. Talladega presently produces and sells 4 0 0 , 0 0 0 tires for the North...
-
Prove that alphabeta pruning takes time O(2 m/2 ) with optimal move ordering, where m is the maximum depth of the game tree.
-
You expect to have $1000 in one year. A bank is offering loans at 6% interest per year. How much can you borrow today?
-
You plan to borrow $1000 from a bank. In exchange for $1000 today, you promise to pay $1080 in one year. What does the cash flow timeline look like from your perspective? What does it look like from...
-
Given the following table, construct a network diagram, either AOA or AON. Times are in days. a. Determine the expected duration of the project. b. Compute the probability that the project will take...
-
What is the purpose of calculating inventory turnover? What is the relationship between inventory turnover and average days in inventory?
-
For each of the following statements indicate whether the statement is true or false. a. The objective of the fourth standard of reporting is to enable users of financial statements to determine the...
-
What are the limitations of internal control?
-
The following questions relate to the auditor's responsibility with respect to litigation, claims, and assessments. Select the best response. a. When auditing contingent liabilities, which of the...
-
Identify and describe the principles of internal control.
-
A car's radio may be subjected to voltage spikes induced by coupling from the ignition system. Pulses on the order of \(\pm 250 \mathrm{~V}\) and lasting for \(120 \mu \mathrm{s}\) may exist. Design...
-
Hardin Services Co. experienced the following events in 2016: 1. Provided services on account. 2. Collected cash for accounts receivable. 3. Attempted to collect an account and, when unsuccessful,...
-
Draw the Lewis structure for the hypothetical molecule N 6 , consisting of a six-membered ring of nitrogen atoms. Using bond enthalpies, calculate the enthalpy of reaction for the decomposition of N...
-
Use of excess cash another option usually available is to reduce the firms outstanding debt. What are the advantages and disadvantages of this use of excess cash?
-
Float an unfortunately common practice goes like this, suppose you are out of money in your checking account; however, your local grocery store will, as convenience to you as a customer, cash a check...
-
Float an unfortunately common practice goes like this, suppose you are out of money in your checking account; however, your local grocery store will, as convenience to you as a customer, cash a check...
-
Continental Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals ar summarized as follows: \ table [ [ , \...
-
Question 2 Conrad Brown is 4 0 years old. He is a livestock farmer in the Free State. During the 2 0 2 3 year of assessment, he [ 4 0 Marks ] established a cherry tree orchard on his farm. His...
-
Drake Corporation is reviewing an investment proposal. The initial cost is $ 1 0 5 , 0 0 0 . Estimates of the book value of the investment at the end of each year, the net cash flows for each year,...
Study smarter with the SolutionInn App