1. An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $600 at the end of Year 6. If other investments of equal risk earn 4% annually, what is its present value? Its future value? Do not round intermediate calculations. Round your answers to the nearest cent. -Present value: $ -Future value: $ 2. Sawyer Corporation's 2020 sales were $7 million. Its 2015 sales were $3.5 million. a- At what rate have sales been growing? Round your answer to two decimal places. % b- Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; so dividing 100% by 5, we find the growth rate to be 20% per year." Is the statement correct? Select: -The statement is correct because 100% divided by 5 equals 20%. -The statement is incorrect because there are 6 years of sales growth between 2015 and 2020. -The statement is incorrect because a company's sales cannot double in such a short time span. -The statement is incorrect since the effect of compounding is not considered.
1. An investment will pay $100 at the end of each of the next 3 years, $250 at the end of Year 4, $400 at the end of Year 5, and $600 at the end of Year 6. If other investments of equal risk earn 4% annually, what is its present value? Its
-Present value: $
-Future value: $
2. Sawyer Corporation's 2020 sales were $7 million. Its 2015 sales were $3.5 million.
a- At what rate have sales been growing? Round your answer to two decimal places.
%
b- Suppose someone made this statement: "Sales doubled in 5 years. This represents a growth of 100% in 5 years; so dividing 100% by 5, we find the growth rate to be 20% per year." Is the statement correct?
Select:
-The statement is correct because 100% divided by 5 equals 20%.
-The statement is incorrect because there are 6 years of sales growth between 2015 and 2020.
-The statement is incorrect because a company's sales cannot double in such a short time span.
-The statement is incorrect since the effect of compounding is not considered.
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