Concept explainers
Reminder Round all answers to two decimal places unless otherwise indicated.
Ponzi Schemes A Ponzi scheme is a fraudulent investment operation in which returns to investors are paid from funds collected from new investors rather than from profit earned by the operator. The scheme takes its name from the notorious operation of Charles Ponzi in
a. Find a formula that gives the return R, in dollars, that the operator must pay after
b. How much money must the operator pay to investors at the end of
c. Assume that new investors pay $
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- Saved Help Save & Exit A new truck costing $50,000 with a residual value of $4,000 has an estimated useful life of five years. Using the declining-balance method at twice the straight-line rate, the depreciation expense in year 2 is: Multiple Choice $18,000 $7,200 $20,000 None of these $12,000 acer ... ...arrow_forwardSuppose that at the beginning of Year 1 you invested 10,000 USD in the Stivers mutual fund and 5,000 USD in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Year Stivers Trippi Year 1 $11,000 $5,600 Year 2 $12,000 $6,300 Year 3 $12,900 $6,900 Year 4 $13,900 $7,600 Year 5 $14,900 $8,600 Year 6 $16,000 $9,300 Year 7 $17,100 $9,900 Year 8 $18,300 $10,700 a. Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations. Mean annual return (to 3 decimals) Stivers is ____% and ____% for Trippi b. Which mutual fund performed better?arrow_forwardSuppose that at the beginning of Year 1 you invested $10,000 in the Stivers mutual fund and $5,000 in the Trippi mutual fund. The value of each investment at the end of each subsequent year is provided in the table below. Year Stivers Trippi Year 1 $10,600 $5,600 Year 2 $11,700 $6,300 Year 3 $12,700 $7,000 Year 4 $14,000 $7,600 Year 5 $15,000 $8,600 Year 6 $16,100 $9,200 Year 7 $17,200 $9,900 Year 8 $18,400 $10,700 Compute the mean annual return for the Stivers mutual fund and for the Trippi mutual fund. Do not round intermediate calculations. Stivers Trippi Mean annual return (to 3 decimals)arrow_forward
- An investment of $36,000 yields a net annual income of $6,500 for 10 years. Wwhat is the annual interest rate of this investment? O a. 15.62% O b. 12.49% O c. 9.62% O d. 16.10% O e. 11.58%arrow_forwardFederal Income tax owed by a married couple filing jointly can be found from the following table. Married Filing Jointly Taxable Income $0-$18,550 $18,551-$75,300 $75,301-$151,900 $151,901-$231,450 T(x) = $231,451-$413,350 $413,351-$466,950 $466,951 or more 10% if Tax Rate $1,855 plus 15% of the amount over $18,550 $10,367.50 plus 25% of the amount over $75,300 $29,517.50 plus 28% of the amount over $151,900 $51,791.50 plus 33% of the amount over $231,450 $111,818.50 plus 35% of the amount over $413,350 (a) For incomes up to $151,900, write the piecewise defined function T with input x that models the federal tax dollars due as a function of x, the taxable income dollars earned $130,578.50 plus 39.6% of the amount over $466,950 0 < x≤ 18,550 if 18,550 < x≤ 75,300 (b) Use the function to find T(40,000). $ if 75,300 < x≤ 151,900 (c) Find the tax due on a taxable income of $100,000. $ (d) A friend tells Jack Waddell not to earn any money over $75,300 because it will raise his tax rate to…arrow_forwardPi ¡Campus Login C Games | Nickelode... = www-awu.aleks.com Year [Hb Week 2 - Using Math Inform Yo Hb PLAY (24) DUCT TAPE PR... First O CONSUMER MATHEMATICS Calculating and comparing simple interest and compound... Second Explanation Find the interest Linda and Bob earn during each of the first three years. Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits. Linda deposits $10,000 into an account that pays simple interest at a rate of 6% per year. Bob deposits $10,000 into an account that also pays 6% interest per year. But it is compounded annually. Interest Linda earns (Simple interest) Type here to search $] Gmail $U YouTube $1 Check ALEKS - Amanda Stephens - Le O E Maps CIS-101 - Page 2.7... Interest Bob earns (Interest compounded annually) $ $0 M + Introduction to Inf Who earns more interest? Linda earns more. Bob earns more. They earn the same amount. J Linda earns more. O Bob earns more. They earn the same amount. O…arrow_forward
- The table below shows a recent state income tax schedule for individuals filing a return. SINGLE, HEAD OF HOUSEHOLD, OR MARRIED FILING SEPARATE SINGLE, HEAD OF HOUSEHOLD, OR MARRIED FILING SEPARATE If taxable income is Over But Not Over Tax Due Is $0 4% of taxable income $15,000 $30,000 $15,000 $600 plus 5.6% of excess over $15,000 $1440.00 plus 6.65% of excess over $30,000. $30,000 a. Write a piecewise definition for the tax due T(x) on an income of x dollars. if 0 ≤x≤ 15,000 T(x)= if 15,000 < x≤ 30,000 if 30,000arrow_forwardThis a financial applications questionarrow_forwardDarryl deposits $1,500 into a savings account that has a simple interest rate of 2.7% lori deposits $1,400 into a savinga account that has a simple interest rate of 3.8% if no other transactions are made who will have more money in their account after 10 years how much more A after 10 years lori will have $27 less then Darryl B after 10 years lori will have 1.1% more than Darryl C after 10 years Darryl will have $16. 50 more than lori D after 10 years lori will have $27 more than darrylarrow_forwardAn Investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Answer is complete and correct. Arithmetic average rate of return Geometric average rate of retum 4.94 % 2.92 % b. What is the dollar-weighted rate of return? (Hint. Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Dollar-weighted rate of…arrow_forwardTax-Deferred Annuities Kate is in the 27% bracket and has $23,000 available for investment during her current tax year. Assume that she remains in the same tax bracket over the next 10 years, and determine the accumulated amount (in dollars) of her investment after taxes if she puts the $23,000 into the following. (Round your answers to two decimal places.) (a) Tax-deferred annuity that pays 7%/year, tax deferred for 10 years. (b) Taxable instrument that pays 7%/year for 10 years. (Hint: In this case, the yield is 5.11%/year.)arrow_forwardarrow_back_iosarrow_forward_ios
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