2. Seven years ago, a sum of money deposited in a savings account that gave a 12% simple interest. The accumulated amount today is RM16650. Using S=P(1+rt). No use excel. a) How much is the initial saving? (RM9048.91) b) How many years from today will the savings amount to RM26640. (5)

2. Seven years ago, a sum of money deposited in a savings account that gave a 12% simple interest. The accumulated amount today is RM16650. Using S=P(1+rt). No use excel. a) How much is the initial saving? (RM9048.91) b) How many years from today will the savings amount to RM26640. (5)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 2MC

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

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