An engineer planning for her retirement will deposit 10% of her salary each year into a stock found. The initial balance in her stock found (year 0) is $20,000. If her salary this year is $120,000 (end of year 1) and she expects her salary to increase by 5% each year, what will be the future worth of the found after 25 years if it earns 15% per year

$4,202,290.77

Explanation:

This can be calculated using the for formula for calculating the future value of growing annuity as follows:

FV = C × {[(1 + r)^n - (1 + g)^n] ÷ (r - g)}

Where;

FV = future value or expected cash flow = ?

C = first year deposit = $120,000 * 10% = $12,000

r = rate of return = 15%, or 0.15

g = growth rate of salary = 5%, or 0.05

n = number of years = 25 years

Substituting all the values into equation (1), we have:

FV = 12,000 × {[(1 + 0.15)^25 - (1 + 0.05)^25] ÷ (0.15 - 0.05)} = $3,543,911.72

FV of initial balance = 20,000 * (1 + r)^n = 20,000 * (1 + 0.15)^25 = $658,379.05

Total FV = FV +  FV of initial balance = $3,543,911.72 + $658,379.05 = $4,202,290.77

Therefore, the future worth of the found after 25 years if it earns 15% per year will be $4,202,290.77.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

our agriculture industry and our business industry