Show Numerically That a Savings Account with a Current Balance

question 76

Essay

Show numerically that a savings account with a current balance of $1,000 that earns interest at 9 percent annually is precisely sufficient to make the payments on a three-year loan of $1,000 that carries equal annual payments at 9 percent interest.

---

Definitions:

Operating Segments

Components of a business that engage in operations that earn revenues, incur expenses, and are reviewed regularly by the company's management.

Reportable Segment

A component of a business that generates revenues and expenses related to the business’s operations, and whose financial results are regularly reviewed by the entity’s chief operating decision maker.

Minimum Revenue

The lowest amount of income considered acceptable or necessary for a company or project to stay viable.

Asset Test

A measure of the liquidity of a company by comparing its liquid assets to its current liabilities.