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wel
2 months ago
9

An insurance firm agrees to pay you $3,310 at the end of 20 years if you pay premiums of $100 per year at the end of each year f

or 20 years. Find the internal rate of return to the nearest whole percentage point.
Business
1 answer:
Mariulka [3.8K]2 months ago
3 0

Answer:

6.43%

Explanation:

The insurance company will calculate the internal rate of return utilizing the method detailed below:

Cash flows      Year involved      Present [email protected]%  Present [email protected]%          

($100)                 1-20                      ($851)                            ($1,487.75)                      

$3,310                 20                        $492                             $1,832.67

                                                        ($359)                           $344.92

IRR=A%+ (a/a-b)*(B%-A%)

A%=10%  a= ($359) B%=3%  b=$344.92  

IRR=10%+(-$359/-$359-$344.92)*(3%-10%)

     =6.43%

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0.45

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4 0
2 months ago
"On January 1, 2019, Eagle Company borrows $100,000 cash by signing a four-year, 7% installment note. The note requires four equ
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Asientos contables:

   Fecha                  Particulares                                   Debito                     Crédito

Ene. 1, 2019           Efectivo                                           $100,000

                                     Notas Pagaderas                                                 $100,000

Dic. 31, 2019        Gastos por Intereses                           7,000

                             Notas Pagaderas                              22,523

                                     Efectivo                                                                     29,523

Dic. 31, 2020      Gastos por Intereses                           5,423

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                                     Efectivo                                                                     29,523

Dic. 31, 2021       Gastos por Intereses                            3,736

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                                     Efectivo                                                                     29,523

Dic. 31, 2022       Gastos por Intereses                            1,931

                             Notas Pagaderas                              27,592

                                     Efectivo                                                                     29,523

Nota: Es importante recordar que los Gastos por Intereses se calculan tomando el Saldo de Notas Pagaderas y multiplicándolo por 7%.

¡Gracias!

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