A small company is investing in XYZ bank with the amount of 1,480,000.00 as its principal amount. The company
plans to invest for 7 years with an interest rate of 1.2% per year.
a. How much would be the interest amount ?
The interest amount will be used to re-invest in a small shoe company that has sales net worth of 68,000.00 in 2020.
b. Did the company attain gain or loss? Why?
Upon investing, the sales net worth for 2021 turned to be 75,777.00.
c. Find the forecasted sale for the years 2022, 2023, and 2024.
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Answer:
a. To calculate the interest amount, we can use the simple interest formula:
Interest = Principal * Interest Rate * Time
In this case, the principal amount is 1,480,000.00 pesos, the interest rate is 1.2% per year (expressed as a decimal, 0.012), and the time is 7 years.
Interest = 1,480,000.00 * 0.012 * 7
Interest = 12,528.00 pesos
Therefore, the interest amount would be 12,528.00 pesos.
b. To determine if the company attained a gain or loss, we need to compare the sales net worth after investing with the initial investment amount.
Initial investment amount = 68,000.00 pesos
Sales net worth in 2021 = 75,777.00 pesos
The company attained a gain because the sales net worth increased from 68,000.00 pesos to 75,777.00 pesos. The gain is the difference between the final sales net worth and the initial investment amount:
Gain = Sales net worth in 2021 - Initial investment amount
Gain = 75,777.00 - 68,000.00
Gain = 7,777.00 pesos
Therefore, the company attained a gain of 7,777.00 pesos.
c. To find the forecasted sales for the years 2022, 2023, and 2024, we need additional information or assumptions. Without specific data or assumptions, it is not possible to provide an accurate forecast for the sales net worth in those years.