3. The difference between the future values of a deposit accumulated for 10 years at a rate of 8% compounded per annum and the future value of same deposit over the same period at 8% compounded quarterly is OR 150. Find the deposit.

3. The difference between the future values of a deposit accumulated for 10 years at a rate of 8% compounded per annum and the future value of same deposit over the same period at 8% compounded quarterly is OR 150. Find the deposit.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 18E

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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.

Question

3. The difference between the future values of a deposit accumulated for
10 years at a rate of 8% compounded per annum and the future value
of same deposit over the same period at 8% compounded quarterly is
OR 150. Find the deposit.

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