Considering the situation described in the question, to write a letter to your manager explaining why you either support or are against this new policy, such a letter will have to be a formal letter.
Writing a Formal Letter to your manager.Usually, when an employee is writing to his manager on the issue of the workplace, it is expected that the intonation and structure of the letter should be formal. This is to make the content of the letter official and different from any other form of a letter.
Therefore, in this case, write a letter to your manager explaining why you either support or are against this new policy, to have to follow these steps.Use Email to write this letter, as it will be faster to deliver.Copy other HR managers in your company.If you're using email, use a company email.Start with a Salutation such as "Dear Sir, "Mention your name and quickly go to the point.List why you are supporting or going against the policy in bullet points.Make your points in simple sentences and very clearly.Close it with a short explanation that your letter is a suggestion, not a directive so as not to sound confrontational End your letter with a salutation such as "Yours faithfully, "Hence, in this case, it is concluded that the right method to use in airing your opinion to the manager concerning the new policy is through a formal letter.
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Check My Work
A random telephone survey of 1,037 adults (aged 18 and older) was conducted by Opinion Research Corporation on behalf of CompleteTax, an
online tax preparation and e-filing service. The survey results showed that 782 of those surveyed planned to file their taxes electronically.
a. Develop a descriptive statistic that can be used to estimate the percentage of all taxpayers who file electronically.
1% (to nearest whole number)
b. The survey reported that the most frequently used method for preparing the tax return was to hire an accountant or professional tax preparer. D
50% of the people surveyed had their tax return prepared this way, how many people used an accountant or professional tax preparer?
(to nearest whole number)
c. Other methods that the person filing the return often used include manual preparation, use of an online tax service, and use of a software tax
program. Would the data for the method for preparing the tax return be considered categorical or quantitative?
- Select your answer --
a) 75.4%
b) 613
c) The data for method of preparing the tax return would be a categorical.
Given that: survey shows 782 of 1037 people would most likely file electronically.
a) To estimate the percentage of all taxpayers who file electronically, we say; (782 / 1037) * 100% = 0.754 = 75.4%.
Given that: 50% said they would use professionals,
b) Now to find how many people did it this way, we say;
( 50 / 100) * 1037 = 518.5 = 518 (we are talking about number of person)
c) Apart from hiring accountant or professional for tax preparation, manual preparation can also be done. Also there are other methods like online tax service or software tax programme. So the data for method of preparing the tax return would be a categorical as the observations can be grouped in different tax preparation methodology category.
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What is a detailed plan that determines what change will happen, who will do it, and when it will occur?
action plan
objectives
strategies
safety
The correct answer for this question is Action Plan.
An action plan is a detailed timeline of necessary steps/procedures needed to be taken to reach a certain goal or objective. It is an integral part of business planning and operations.
Each step proposed in the plan is allocated a specific time, human resources, other resources, possible challenges, and the desired objective of that step.
It is a complete step-by-step guideline, assigning responsibilities and deadlines to ensure effective use of time and resources to achieve intended results.
An action plan is necessary in any business, project, and management planning; and is one of the most useful tools in the business management arsenal.
Therefore the answer to the aforementioned question is Action Plan.
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Which are possible employers in the Financial career cluster? Check ALL that apply.
O private company
O government
O nonprofit organization
bank
Ostock market
Quants are particularly sought-after in the trading sector, where they use algorithms to pinpoint the most profitable trading opportunities.
What are the possible employers in the Financial career?Asset managers, banks, hedge funds, insurance companies, and private equity firms all use quants to help with opportunity and risk detection.
Retail sales, insurance services, banking and related services, and business financial management.
Therefore, Employees can work for themselves in the insurance sales, tax preparation, financial planning, and investment management industries.
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Question 9 of 10
Governments can cause the supply of a good to decrease by:
OA. funding training related to making the good.
B. investing in new technology to produce the good.
C. reducing the taxes paid to make the good.
D. adding expensive regulations on the good.
SUBI
Answer:
D
Explanation:
hope this helps I'm not sure if it's correct
A four-day workweek typically requires employees to work ________.
A. four ten-hour days
B. five eight-hour days
C. four four-hour days four
D. twelve-hour days
After taking guitar lessons for a short period of time, you can state that you are developing a(n) ____ for playing a guitar.
A. aptitude
B. skill
C. repetition
D. all of the above
Edge. EXAM
HELP!!! BEING TIMED
1. A four-day workweek typically requires employees to work A. four ten-hour days
2. After taking guitar lessons for a short period of time, you can state that you are developing a(n) aptitude for playing a guitar.
What is an aptitude?An aptitude is a component of competence to perform a specific type of work at a specific level. Outstanding aptitude can be classified as "talent." Aptitude is the inborn ability to perform specific types of activities, whether physical or mental, developed or undeveloped.
Aptitudes are a person's innate talents and abilities for learning or doing certain things in various areas. A person's ability to carry a tune, for example, is considered an aptitude. Most people have a variety of related skills, such as singing, reading music, and playing an instrument.
It should be noted that there are typically 40 working hours in a week. Therefore, if there are 4 working days. The number of hours worked will be:
= 40/4
= 10
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• What is the number of units to be produced if the firm desires to make a cost per unit and profit of Birr10,000 assuming the fixed cost, variable selling price per unit are Birr50,000, Birr10 and Birr20 respectively
The number of units to be prod-uced if the firm desires to ma-ke a cost per unit and profit of Birr10,000 is 6000 units.
What is cost per unit?Cost per unit refers to bot-h the variable costs and fixed costs associa-ted with producing and deliver-ing a single unit of any pro-duct to an end consumer. Moni-toring your cost of goods sold helps cre-ate context to set pricing and en-sure profit is gener-ated.
Solution:
let assume the un-its to be prod-uced by X.
then sa-les (20X)= variable cost (10X) + fixed cost (50000) + profit (10000)
20X = 10X + 50000 + 10000
X = 6000 units
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when a firm uses cross-docking technique: must be staged for shipping typically moves directly from receiving to shipping always is tagged for shipping is considered short movement freight
When a firm uses cross-docking technique it typically moves directly from receiving to shipping.
By swiftly switching freight from one mode of transportation to another at the docking facility, a cross-docking strategy reduces warehousing activities and labor. This process ensures quicker fulfillment times and cost savings.
Cross-docking can assist in lowering the cost of transportation. Less wasted kilometers result from better routing, which lowers fuel expenditures and related car maintenance expenses. Cross-docking also reduces the cost of fixed assets. Cross-docking uses up less space in the facility.
5 Types of Cross Docking Services
Manufacturing cross docking:Distributor Cross Docking:Transportation cross docking:Retail cross docking:Opportunistic cross docking:to know more about cross-docking technique visit
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Following this weekend's attack on a Saudi oil field, a headline reads: "Oil prices to skyrocket reducing demand."
Respond to the two claims in the headline:
1) Are oil prices likely to rise? Why or why not?
2) Is demand likely to fall? Why or why not?
As regards the price of oil rising, the claim is true because the supply of oil would fall as a result of the attack on the Saudi oil field.
The demand is not likely to fall as oil is a highly demanded product which means that people will still demand it regardless of price.
How is demand affected by terrorist attacks?When there is an attack on a company or organization that produces a certain good or service, there is a likelihood that supply would fall. This is simply because the company would likely be able to produce less than what it has been producing before. This would lead to less products available for more people and so prices would rise.
This is what would happen in the situation where there was an attack on a Saudi Oil Field. The Saudis would only be able to produce less oil which would then lead to a price increase in oil. However, the demand is not likely to fall from this increased price because oil is a highly demanded product by people across the world.
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Disney’s expansion from short films to animated films to live action films to television is an example of
A.)expansion into new geographies by leveraging a core capability.
B.)expansion into new markets by leveraging a core capability.
C.)expansion into new geographies by leveraging assets.
D.)expansion into vertical markets by leveraging a core asset.
E.)expansion into vertical markets to address critical supplier power.
Market expansion through utilizing a core competency is the reason behind Disney's diversification.
A company's competitive edge in the market is derived from its core capabilities, which set it apart from its rivals. Instead of physical or monetary assets, a company's set of abilities or knowledge in a particular field is typically referred to as its core competency. The strategic strength of an organization is its core competency. Honda's engine and propulsion systems, for instance, are a key strategic advantage. Sony's primary area of expertise is miniaturization. The areas of logistics and customer support are fundamental competencies for Federal Express.
Find the underlying talent, ability, knowledge, experience, technology, or procedure that enables your organization to offer its distinct range of goods or services when identifying your company's core competencies. Find ways to leverage the core strengths of your business to create strategic responsiveness and acquire a competitive edge.
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Nieman Company purchased merchandise on account from Springhill Company for $12,500, terms 1/10, n/30. Nieman returned merchandise with an invoice amount of $3,100 and received full credit.
If Nieman Company pays the invoice within the discount period, what is the amount of cash required for the payment? If required, round the answer to the nearest dollar.
What account is debited by Nieman Company to record the return?
The amount of cash that is required for the payment, given the invoice being paid in the discount period is
The account that is to be debited by Nieman Company to record the return is Accounts Payable .
How to record merchandise returned?When a company returns units of merchandise that it purchased, the account that will be credited is the Purchases Returns account. If the merchandise was purchased on credit, then the Accounts Payable account is to be debited to show the company no longer owes the seller. This is what happens to Nieman Company.
The net purchases by Nieman company is:
= Merchandise value - Merchandise returned
= 12, 500 - 3, 100
= $9, 400
The cash required would be:
= 9, 400 x (1 - discount amount)
= 9, 400 x (1 - 1%)
= $9,306
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Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $100. The materials cost for a standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $200,000. The machinery costs $1 million and is depreciated straight-line over 10 years to a salvage value of zero. a) What is the accounting break-even level of sales in terms of the number of diamonds sold? Note: Do not round intermediate calculations. b) What is the NPV break-even level of sales assuming a tax rate of 21%, a 10-year project life, and a discount rate of 12%? Note: Do not round intermediate calculations. Round your answer up to the nearest whole unit.
The accounting break even is 5,000.
The NPV breakeven level of sales is 7,510.
What are the breakeven points?
Breakeven quantity are the number of units produced and sold at which net income is zero
Breakeven quantity = (depreciation + fixed cost) / price – variable cost per unit
Depreciation = (cost of the asset - salvage value) / useful life
Depreciation = ($1,000,000 - 0) / 10 = $100,000
Breakeven quantity = ($100,000 + $200,000) / ($100 - $40)
Breakeven quantity = $300,000 / $60 = 5,000
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Cash flow = (sales revenue - variable cost - fixed cost ) x (1 - tax) + (depreciation x tax)
Cash flow = (100d - 40d - $200,000) x (1 - 0.21) + (100,000 x 0.21)
Cash flow = (60d - $200,000) x 0.79 + 21,000
Cash flow = 47.4d - $158,000 + 21,000
Cash flow = 47.4d - $179,000
When NPV is break-even, it would have a value of 0.
Thus, cost of the asset =present value of the cash flows in 10 years
1,000,000 = (47.4d - $179,000) x (1 - (1 + r)^-n] / r
1,000,000 = (47.4d - $179,000) x (1 - (1.12)^-10] / 0.12
1,000,000 = (47.4d - $179,000) x5.650223028
1,000,000 = 267.81d - 1,011,350
1,000,000 + 1,011,350 = 267.81d
2,011,350 = 267.81d
d = 2,011,350 / 267.81
d = 7,510
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For this project, you will conduct your own informal study to observe one part of the facial feedback theory firsthand. For one week (seven days), you will survey and record people’s moods. You will be mimicking the first two parts of the facial feedback research study conducted by Kleinke, Peterson, and Rutledge. Be sure you understand how the study conducted by Kleinke, Peterson, and Rutledge was executed. You may wish to listen to the case study again or conduct your own research about facial feedback studies. You will compile your results and reflect on your findings in a written paper
The study of human behavior is called psychology.
The facial feedback theory is defined as the reading the expression of the person for his behavior.
No one wants to make someone unhappy by saying something. Therefore, everyone smiles at the situation they do not want to answer and don't want to make them feel hurt.
According to the facial feedback hypothesis, people's emotional experiences are influenced by their facial expressions. Smiling, for example, should make people feel happier, while frowning should make them feel sadder.
A smile and happy face represent a good response
Bad face represents bad response
Hence, everyone showed with a smiling face
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Jansen Company’s general ledger showed a checking account balance of $25,020 at the end of May 2021. The May 31 cash receipts of $2,460, included in the general ledger balance, were placed in the night depository at the bank on May 31 and were processed by the bank on June 1. The bank statement dated May 31, 2021, showed bank service charges of $50. All checks written by the company had been processed by the bank by May 31 and were listed on the bank statement except for checks totaling $2,010. Required: Prepare a bank reconciliation as of May 31, 2021. [Hint: You will need to compute the balance that would appear on the bank statement.]
$24,520 is the balance in a bank reconciliation as of May 31, 2021. The goal of this process is to determine the differences between the two and, as necessary, make changes to the accounting records.
What is the journal entry for bank reconciliation?When there are changes to the balance on the books, journal entries are required in a bank reconciliation. These adjustments are the result of bank statement items that were not recorded in the company's general ledger accounts.
Given
Bank Balance = $25,020
Cash Receipts = -$2460
Bank Charges = - $50
Collection = + 2010
Bank balance after reconciliation = $24,520
Bank reconciliations are an important internal control tool for preventing and detecting fraud. They also aid in the identification of accounting and banking errors by explaining the differences between the cash balances on the accounting record and the bank balance position on the bank statement.
Thus, the balance of $24,520 is shown in the bank account.
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Why do countries switch from one economic system to another?
Explanation:
One reason that countries may switch from one economic system to another is because they may fine the system they're switching to to be more benifitial than the other.
Recall the formula for GDP. A local news agency reports that "An increase in imports has reduced GDP this quarter." Is this statement true or false? Why?
If a statement from a new agency says that An increase in imports has reduced GDP this quarter, this is a true statement.
The reason it is true is that it shows that a lot of imports have happened in the nation that year and less goods made in the nation.
What is meant by GDP?The most widely used indicator of an economy's size is its gross domestic product (GDP). GDP can be calculated for a nation, a region (such as Tuscany in Italy or Burgundy in France), or for a group of nations (such as the European Union) as a whole (EU)
GDP calculates the monetary value of the final goods and services—those purchased by the consumer—produced in a nation during a specific time period (say a quarter or a year). It accounts for all the output produced inside a nation's boundaries.
Hence this is true because more imports would mean that a nation has lower GDP in the nation in that [particular year.
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When preparing an estimated value of contents list for your renter's insurance, which of the following would you include on that list?
Answer: all of the above
Explanation:
renters insurance policies list your name and the address of the home you lived in and typically offer Personal Property Coverage (Coverage C), to cover the cost to clean or replace your belongings, and Loss of Use Coverage (Coverage D) for additional living expenses you incur until you find a replacement home or ...
television
computer
stereo
Answer:
Renters insurance policies list your name and the address of the home you lived in and typically offer Personal Property Coverage (Coverage C), to cover the cost to clean or replace your belongings, and Loss of Use Coverage (Coverage D) for additional living expenses you incur until you find a replacement home or
Explanation:
3.2.2 Quiz: The Function of Money
Question 6 of 10
In order for money to work properly, there can be only a certain amount of it in
the economy and there must be rules on who can print it. This is an element
of which characteristic of money?
A. Limited supply
B. Divisibility
C. Uniformity
O D. Acceptability
SUBMIT
The many forms of cash in an economy should resemble one another for money to function properly. This is a component of money's Uniformity. Option C is accurate as a result.
What is reffered to as currency ?Anytime someone wants to sell anything or buy something, whether it be for themselves, a friend, a family member, or anybody else, they must pay a set sum of money, which is referred to as currency.
The Indian Rupee, which is the country's currency, must be used to buy or pay for anything in India. In Saudi Arabia, the Saudi Riyal is the preferred money. There is a market called the free market, and in that market, gold is also regarded as a form of money. Money should be uniform in order for the currency to operate well.
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Macmillan L
Price per pound
CPI
$7
123
$13
155
What is the inflation rate between 2010 and 2011?
2010
2011
2.07% each year
Worth of $100 from 2011 to 2012
The dollar had a typical expansion pace of 2.07% each year somewhere in the range of 2011 and 2012, creating a combined cost increment of 2.07%. This implies that costs in 2012 are 1.02 times higher than normal costs beginning around 2011, as per the Department of Work Measurements customer cost file.
What is the recipe for expansion utilizing CPI?
To start with, deduct the CPI from the very outset date (A) from the later date (B), and gap it by the CPI for the starting date (A). Then, at that point, increase the outcome by 100 to get the expansion rate.
What is expansion rate model?
The rate lets you know how rapidly costs rose during that period. Gas costs will be 2% higher one year from now in the event that the expansion rate for a gallon of gas is 2% each year. That implies a gallon of gas that costs $2.00 this year will cost $2.04 one year from now.
Is CPI equivalent to expansion?
Ordinarily, costs ascend over the long haul, however costs can likewise fall (a circumstance called flattening). The most notable mark of expansion is the Buyer Value List (CPI), which estimates the rate change in the cost of a bin of labour and products consumed by families.
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Direct labor is ______.
Direct Labour is the sum of money given to employees who are directly involved in the manufacturing of items. It varies in direct proportion to production level.
What distinguishes direct from indirect labour?
Only labour engaged in the manual production of products and services is regarded as direct labour, which is how direct labour differs from indirect labour. Indirect labour is the default classification for all other work.Is the cost of direct material fixed?
A prime example of a variable cost is the price of direct materials. Remember that a fixed cost is one that keeps the same overall and reduces as a result per unit as the activity level rises.What is an example of indirect labour?
The production manager, the buying staff, the material handling staff, the material management staff, and the quality control staff are a few examples of indirect labour employment.To know more about labour, check out this link:
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In this example, Daniel & Claire each deposited $10,000 in high interest savings accounts and each earned 5% interest annually. Daniel’s ROI remained the same each year while Claire’s increased each year. What type of interest did Daniel’s bank pay? What type of interest did Claire’s bank pay?
1. Daniel's bank pay paid the regular simple interest, which does not compound on accumulated interest.
2. On the other hand, Claire's bank pay was paying a compounding interest on her savings account.
What is the difference between simple and compounding interests?Simple interest is based on the regular interest rate, which does not compound accumulated interest.
The simple interest system applies the interest rate periodically on the principal without adding the accumulated interest.
On the other hand, compound interest adds accumulated interest to the principal before applying the interest rate to the sum each period.
For illustration:
Daniel's simple interest for two years:
= $10,000 x 5% x 2
= $1,000
ROI after 2 years = 10% ($1,000/$10,000 x 100)
Claire's compound interest for two years:
= $10,000 x 1.05^2
= $10,000 x 1.1025
= $11,025
= $1,025 ($11,025 - $10,000)
ROI after 2 years = 10.25% ($1,025/$10,000 x 100)
Thus, Claire's return on investment (ROI) is greater than Daniel's.
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Suppose you are filling out an annual self-evaluation and you are asked how you can demonstrate that you have continued to learn current research related to the field you work in. What would best demonstrate this?
additional classes
finishing projects
attending meetings
renewing certification
As a landlord, Jason wants to protect himself in the event that taxes on his apartment complex increase. To do so, he most likely will add a(n) _____ clause to his rental agreements.
As a landlord, Jason wants to protect himself in the event that taxes on his apartment complex increase. To do so, he most likely will add a(n) escalator clause to his rental agreements.
Many aspects of your business, including revenue goals, marketing objectives, target audience, brand positioning, and product attributes, are taken into consideration in pricing strategies. External factors like consumer demand, competitor pricing, and overall market and economic trends also have an impact.
1914 saw the passing of the Federal Trade Commission Act (FTCA).It laid out the Government Exchange Commission (FTC), which had the power to uphold regulations pointed toward restricting unjustifiable strategies for rivalry.
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Allen: Mary, you say something is missing; you feel alone and stalemated when you look at yourself from a deeper level. There's something missing for you . . . (pause) . . . There's something missing that's meaningful.
What is the microskill used?
a. Closed question
b. Open question
c. Encourager/restatement
d. Paraphrase
e. Reflection of feeling
f. Summary
g. Reflection of meaning
Answer:v
Explanation:
v
how might the inflation tax explain the creation of inflation by a central bank?
The inflation tax can be used to give an explanation of how the inflation in an economy may be deliberately created by a government.
How does inflation tax occur?Let's say the government requires funding for initiatives. The government is then given money that the central bank has printed to fund initiatives. The market's overall money supply rises as a result. Furthermore, inflation rises.
As a result of inflation, you will now receive fewer goods for the same amount of money. Indirectly, the central bank transferred money from you to the government for use. You will have the same amount of money as before in this situation. However, using that money will allow you to purchase fewer goods than previously. Therefore, it is a type of tax known as an inflation tax.
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Identify a product you use that have increased or decreased in supply recently. How did the change in supply affect the price? Try to show it on a graph.
Books and Audio Books are the products that have increased in supply recently. The price is much lower that its demand increased a lot leading to increase in supply to catch up the increasing demand.
Reason:
Nowadays, many online platforms and stores have apps that provide their consumers with incentives and prizes. With the help of the Libby app, you may typically access library books and podcasts from your phone for no cost. By logging in with their public library card, users can check out e-books.
As the supply for books has increased one can get books at cheaper prices than usual
Some sites provides free e-books, which results in tons of free books supply.
What is law of supply?
According to the law of supply, manufacturers will increase their supply to the market if the price is higher.
Businesses produce more of a good or service when they anticipate paying a greater price for it because they want to boost their revenue.
In the meanwhile, suppliers are discouraged from manufacturing as much if prices drop.
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Will Social Security be around for you? Why or why not? What is the problem? Will the problem last? How can it be fixed? Will Social Security go away! What are the political implications?
(One paragraph answer)
Yes I believe that social security would still be around for me. The reaosn it would be around is due to the fact that people still continue to pay taxes and this is what is used to fund these programs.
The problem is that there is rising unemployment in the nation. If a policy that is implemented to create jobs exists, the problem would have to go away.
No it would not go away. So there would be no negative implications.
What is social security?Any scheme of social protection established by law or other legally required arrangement that offers people some degree of financial security when faced with the contingencies of old age, survivorship, incapacity, disability, unemployment, or childrearing is referred to as social security. Access to curative or preemptive medical care may also be provided.
Pensions for the elderly, disabled, and survivors are the most prevalent type of program worldwide. Programs for benefits for work-related illnesses and injuries, sickness and maternity, family allowances, and unemployment are next in popularity.
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Very low unemployment is not usually desirable because
a. Competition for workers leads to wage increases which can lead to price increases.
b. The more people are employed, the fewer are on welfare.
c. This causes employers to bring in illegal immigrants to fulfill their labor needs.
d. The number of foreign competitors will flood the market with substitute goods.
Very low unemployment is not usually desirable because competition for workers leads to wage increases which can lead to price increases. Thus, option (a) is correct.
What is unemployment?The term unemployment refers to the person are not occupied in job activity. The person is searching for job with the basis of qualification, experience, and knowledge basis. Unemployment is the drawback of the economy system.
According to government data, lower unemployment levels suggest that there are more workers, which leads to higher inflation and worse production. There are graphs that indicate the bad outcomes.
Therefore, option (a) is correct.
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What are the three main factors that search engines look for when
delivering results on the search engine results page?
1.
2.
3.
Three main factors that search engine look for are Relevance, Distance, Prominence.
Relevance- The term refers to how well a website's information corresponds to a search query. Relevance criteria include visible text, images, and videos as well as content elements. Furthermore, meta elements such as title, meta description, and alt tags can be used to generate relevance.
Distance- Based on the user's browser information, distance determines how close the search user is to local businesses. The greater the distance between the search user and a local business, the more likely that business will appear in the local maps results.
Prominence- The location of a keyword on a page is said to influence search rankings. SEO experts recommend using the target keyword of a page early in order to benefit from a ranking signal known as keyword prominence.
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Your friend is married, owns a home, and has two children. He wants to get the most insurance possible for the cheapest rate. Which policy would you recommend?
Answer:
Term life insurance
Explanation:
What does term life insurance mean?
A term life policy is a contract between you and an insurance company for a defined period, typically between 10 and 30 years. During that term, you promise to pay a premium each month. In return, the company promises to pay a specific amount of money – a death benefit – if you pass away during the term.
Answer:
He wants to get the most insurance possible for the cheapest rate
Explanation:
the cheep ome
Your friend offers to pay you an annuity of $9,200 at the end of each year for 3 years in return for cash today. You could earn 5-5% on your
Select the correct answer.
Oa. $24,820.99
O b. $24,801.79
O c. $24,811.39
O d. $24,830.59
Oe. $24,792.19
The most that should be paid for the annuity is $24,820.99
How to calculate the present value of an ordinary annuity?
Since the annuity of $9,200 will be paid at the end of each year, the most that should be paid for the annuity can be calculated using the formula for calculating the present value of an ordinary annuity as follows:
PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)
Where;
PV = Present value or the most you should pay for the annuity = ?
P = Annuity payment = $9,200
r = Interest rate on other investment = 5.5%, or 0.055
n = number of years = 3
Substitute the values into equation (1), we have:
PV = $9,200 * ((1 - (1 / (1 + 0.055))^3) / 0.055) = $24,820.99
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