How Long Does it Take for $14050 to Grow to $26500 at 15% Interest Rate?

Which of the following statements is correct?

Compared to corporations, it is easier to make a decision in sole proprietorship II. It is difficult to transfer ownership in a sole proprietorship.

O Only

O II only

O Both I and II

O Neither I nor II

Answer:

It would take approximately 4.54 years for $14,050 to grow to $26,500 at an interest rate of 15%. The correct statement is II only: It is difficult to transfer ownership in a sole proprietorship.

To calculate the time it takes for an amount to grow to a certain value, we can use the formula for compound interest:

Future Value = Present Value * (1 + Interest Rate)^Time

We need to solve for Time in this case. Rearranging the formula, we have:

Time = log(Future Value / Present Value) / log(1 + Interest Rate)

Plugging in the values, we get:

Time = log($26,500 / $14,050) / log(1 + 15%) ≈ 4.54 years

Therefore, it would take approximately 4.54 years for $14,050 to grow to $26,500 at an interest rate of 15%.

Regarding the statements, the correct statement is II only: It is difficult to transfer ownership in a sole proprietorship. In a sole proprietorship, the owner has complete control over decision-making, making it easier to make decisions compared to corporations where decision-making often involves multiple stakeholders. However, transferring ownership in a sole proprietorship can be challenging as it typically requires legal and financial processes to transfer assets and liabilities. Therefore, statement I is incorrect.

To summarize, it would take approximately 4.54 years for $14,050 to grow to $26,500 at an interest rate of 15%, and the correct statement is II only: It is difficult to transfer ownership in a sole proprietorship.