5-6. (Compound value) Obaidullah Hamzah, who recently sold his Förd Mustang, placed $15,000 in a savings account paying annual compound interest of 7 percent. a. Calculate the amount of money that will be accrued if he leaves the money in the bank for 1,5, and 15 years. b. If he moves his money into an account that pays 8 percent or one that 10 percent, rework part (a) using these new rates. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem? pays

5-6. (Compound value) Obaidullah Hamzah, who recently sold his Förd Mustang, placed $15,000 in a savings account paying annual compound interest of 7 percent. a. Calculate the amount of money that will be accrued if he leaves the money in the bank for 1,5, and 15 years. b. If he moves his money into an account that pays 8 percent or one that 10 percent, rework part (a) using these new rates. c. What conclusions can you draw about the relationship between interest rates, time, and future sums from the calculations you have completed in this problem? pays

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 8E

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Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
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Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years. b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent. c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did? use EXCEL to work this out and show the formula!
1. At the beginning of the year, P5, 000 was invested in a deposit account earning 8% annually. How much will the deposit be after a year? 2. Supposed your father deposited in your bank account P10,000 at an annual interest rate of 10% compounded yearly. When you graduated from Grade 6 and did not get the amount until you finished Grade 12. How much will you have in your bank account after 7 years? 3. At the beginning of the year, P2,000 was invested in a deposit account earning 8% compounded annually for 5 years. How much will the investment be after 5 years? 4. ABCD Company is an investor in oil companies and they should deposit now in order to receive P50,000 at the start of each year for 3 years at a 12% annual compounding interest rate. How much will the investment be after 3 years? NOTE: please use the formula below. Thank you!!
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1. How much must a man deposit in a bank that pays 7% compounded annually so that after 10 years he will have P3,000,000 2. How much must a corporation deposit in a bank which credits interest at 12% compounded monthly to come up in 8 years with P2,500,000 needed for its expansion program? 3. In purchasing of house, a man makes P720,000 down payment and agrees to pay P1,200,000 5 years later. Find the cash value of the house if money is worth 14% compounded semi-annually. 4. On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded quarterly. How much must he invest if he wants to accumulate P650,000 by the time the child reaches his 21st birthday? 5. To provide for a purchase of a car worth P950,000 as a gift to his mother 5 years from now. How much should Benjamin invest today at 18% compounded quarterly? 6. Mrs. Dela Cruz invested P70,000 at 12% compounded quarterly for 5 years and another P70,000 at 18% compounded semi-annually for the…
NOTE: STRICTLY USE THE GIVEN FORMULA IN THE PHOTO ATTACHED 1. How much must a man deposit in a bank that pays 7% compounded annually so that after 10 years he will have P3,000,000 2. How much must a corporation deposit in a bank which credits interest at 12% compounded monthly to come up in 8 years with P2,500,000 needed for its expansion program? 3. In purchasing of house, a man makes P720,000 down payment and agrees to pay P1,200,000 5 years later. Find the cash value of the house if money is worth 14% compounded semi-annually. 4. On the birth of a child, a father wished to invest in a trust fund which gives 12% compounded quarterly. How much must he invest if he wants to accumulate P650,000 by the time the child reaches his 21st birthday? 5. To provide for a purchase of a car worth P950,000 as a gift to his mother 5 years from now. How much should Benjamin invest today at 18% compounded quarterly? 6. Mrs. Dela Cruz invested P70,000 at 12% compounded quarterly for 5 years and…