A young engineering student has just graduated in college. He is able to obtain his first job and desires to establish a retirement fund. At the end of every year, he deposits ₱5,000. Money is worth 12% compounded annually. How old is he when the fund has an accumulated value of ₱2M?

A young engineering student has just graduated in college. He is able to obtain his first job and desires to establish a retirement fund. At the end of every year, he deposits ₱5,000. Money is worth 12% compounded annually. How old is he when the fund has an accumulated value of ₱2M?

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 6E

See similar textbooks

Related questions

Q: A young man has decided to go into business at the age 40. He wishes to accumulate P 200,000.00 at…

A: Future Value = 200,000 Current Value invested = x Deposit will increase each year by 10% Rate = 9.6%…

Q: Jin decided to sell their farm and to deposit the fund in a bank. After computing the interest, they…

A: The provided information are: Withdrawal amount=P480000 for 8 years Starting at the end of 6 years…

Q: Tatsumi invested Php 10,000 now for the college education of his three-year old son. If the fund…

A: Amount invested today (A) = Php 10000 Age of son today = 3 years He needs to withdraw for 4 years (m…

Q: Your friend is celebrating his 25th birthday today and wants to start saving for his retirement at…

A: Annual withdrawal = $ 100,000 Annual interest rate = 6% Number of withdrawals = 20 As per formula…

Q: Starting on his 25th birthday, Jason makes 20 semi-annual payments of P15,000 each in a savings…

A: Compound interest refers to the interest that is calculated on a deposit or loan on the basis of an…

Q: In order to raise fund worth Php10, 000,000, a man started depositing Php50, 000 at the end of every…

A: FV = 10,000,000, PMT = -50,000, rate = 16%/12, PV = 0 use nper function in Excel number of months…

Q: Cody invested the profit of her business in an investment fund that was earning 2.25% compounded…

A: Given, The amount of withdrawal is $5000. Interest rate is 2.25% compounded monthly.

Q: Robert invested the profit of his business in an investment fund that was earning 3.25% compounded…

A: Interest rate = 3.25% Semi annual interest rate = [1+(0.0325/12)]6-1…

Q: (Refer to this word problem. , Samuel wishes to have P500,000 available for his son's college…

A: Accumulated value (F) = P 500000 t = 14 years = 28 semiannual periods r = 4.4% per annum = 2.2%…

Q: James Rivera earned his degree in drafting at a community college and recently began his new career.…

A: Given: Daily deposit =$2500 at the end of each yearInterest rate (r)=8%N=15 yearsK=1 compounded…

Q: Starting on her 30th birthday, a woman will invest an amount every year on her birthday in an…

A: future value of annuity formula: future value of annuity=Annuity×1+rn-1r×1+rwhere,r=rate of…

Q: Your uncle has P375,000 and wants to retire. He expects to live for another 25 years, and he also…

A: This is annuity due Using excel PMT function to calculate amount withdraw

Q: Your brother, who is 6 years old just received a trust fund that will be worth $25,000 when he is 21…

A: For this we will need to calculate the present value of the fund. using present value = future value…

Q: Bob has saved a total of ₱2,550,000.00 for retirement. He put the money in a mutual fund which pays…

A: We need to use annuity formula given below to calculate size of monthly withdrawal PMT…

Q: The Chan family would like to establish a bursary at Camosun College. The bursary pay $2,000 to a…

A: This payment is a perpetuity, meaning that this payment will occurs indefinitely. In a perpetuity,…

Q: Allain Dupre wants to set up a scholarship fund for his school. The annual scholarship payment is to…

A: Using excel PV function

Q: Mr. Bienvenido Bautista needs a fund of Php1,000,000 to renovate his house. To provide for this, he…

A: Future value required (FV) = Php1,000,000 Interest rate = 12% Monthly interest rate (r) = 12%/12 =…

Q: Mr. J. J. Parker is creating a college fund for his daughter. He plans to make 15 yearly payments of…

A: GIVEN, YEARLY PAYMENT = $1500 N = 15 YEARS R = 12% LET FOUR YEARLY WITHDRAWAL = A withdrawal from…

Q: A man who won 730,000 pesos in a lottery decided to place 50% of his winnings in a trust fund for…

A: A man won a lottery of worth = 730,000 pesos He invested 50% in trust funds for his son education =…

Q: I am setting up a fund for my son to go to college. I figure that he will need Php50,000 by the time…

A: Future value (FV) = Php. 50,000 Annual interest rate = 5.75% Monthly interest rate (r) = 5.75%/12 =…

Q: A new employee puts 4% of his salary of $65,000 into a retirement account, and his employer matches…

A: salary = $65,000 employee contribution=4% of salary=$65,000x 0.04=$2600 employer contribution=3% of…

Q: 3. Tatsumi invested Php 10,000 now for the college education of his three-year old son. If the fund…

A: Amount invested (A) = Php 10000 Duration till 18th age = 15 years Let the amount son will get from…

Q: Jacqueline invested the profit of her business in an investment fund that was earning 2.50%…

A: Let the amount invested in the fund be $ X. Interest rate = 2.50 % compounded monthly The money is…

Q: Ted Houser wishes to accumulate a fund of $40,000 for the purchase of a house and lot. He plans to…

A: The computations as follows: While considering the table of future value of annuity, it can be…

Q: 1. Diego deposited Php 1,000,000 on a bank that earns 20 % compounded annually. Five years later, he…

A: Future value of the amount deposit today can be found using the formula : Future value = Present…

Q: Tom and Sandy have set up a sinking fund in order to have $18,000.00 in 4 years for their child's…

A: Using excel PMT function

Q: Starting on her 30th birthday, a woman will invest an amount every year on her birthday in an…

A: FVA FORMULA: FVA=A×1+RN-1R

Q: A wealthy donor wants to establish a scholarship that pays an award of $1,000 in perpetuity at the…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Mrs. Christell Lee deposited Php50,000 now in an account for the college education of her 3-yeard…

A: Future value from present value concept is used to determine the value of deposits before starting…

Q: A young man has decided to go into business at age 40. He wishes to accumulate P200,000.00 at that…

A: Given: Future Value = P200,000 Current Value invested = x Deposit will increase each year by 10%…

Q: You need Php 80,000 per year for four years to go to college. Your father invested Php 100,000 in a…

A: Investment = Php 100,000 Interest rate = 7% Annual fees = Php 80,000 Number of payments = 4 Future…

Q: A man invested P60,000 now for the college education of his 2-year old son. If the fund earns 14%…

A: Future Value: It is value of money (expected to be worth in the future) at a future date based on…

Q: Mr. Canlapan deposited his money from selling his old vehicle. The fund would allow him to withdraw…

A: Determine the value of the fund deposited after a year using the Excel PV function with the…

Q: Phoebe saved a total of $2 550 000 for her retirement. She invested the money in a mutual fund that…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: .What was size of the investment in the fund if it was earning 5.50% compounded semi-annually?

A: Present Value of Perpetuity Due: It refers to the present worth of the annuity payments made for…

Q: s

A: Given n =30 i =11% Now Find the value of his account when he is 60 years old.

Q: John won a lottery. After taxes, he was able to take home his winnings worth $510000. He decides to…

A: We need to use compound interest formula to solve this problem A=P(1+i)n Where A=Future amount P=…

Q: A mother wishes to have Php800,000 eight years from today for her son’s graduation. How much should…

A: Future value (FV) = Php800,000 Monthly interest rate (r) = 0.0116666666666667 (i.e. 0.14 / 12)…

Q: A young student 22 years old has just graduated from college. She accepts a good job and desires to…

A: Current Age = 22 Annual Deposit = 2000 Interest Rate = 15% End of year deposits Future Value =…

Q: Ms. Lee is thinking about her retirement fund and she still have another 15 years to reach her…

A: Time to retirement = N = 15 years Deposit each year = 4800 Return = 6%

Q: Jacqueline invested the profit of her business in an investment fund that was earning 2.50%…

A: Time value of money (TVM) refers to the method or concept which is used to determine the amount of…

Q: A person sets up a sinking fund in order to have P100,000 after 10 years for his children’s college…

A: Future Value Required = 100,000 Time Period = 10 years or 20 semi annual periods Interest Rate =…

Q: In order to save for her high school graduation, Marie decided to save ₽200 at the end of each…

A: Note: “Since you have asked multiple questions, I will solve the first question for you. If you want…

Q: Mr. Crabapple wants to donate money now for an account that will allow a favored charity to make…

A: Annnuity at the end of each year from year 19 to 44 = $17,000 Time = 26 years Rate = 4.3% annually…

Q: A 1,000,000-trust fund was set up and to be used by an 8-year old nephew when he goes to college. In…

Q: A first-year engineering student wants to have $30,000 at graduation 4 years from now to buy a new…

A: Given: Future value (FV) = 30,000 Present value (P) = 10,000 Interest rate = 12%

Q: If he deposits 2000 at the end of every year into a special account for seven years and the bank…

A: This problem can be solved in light of annuity and future value. Total amount in the deposit account…

Q: A high school student received from his wealthy ant $15,000. He decided to put it in an account…

A: Here, Amount Received today (PV) is $15,000 Amount Required (FV) is $25,000 Interest Rate (r) is…

Question

3. A young engineering student has just graduated in college. He is able to
obtain his first job and desires to establish a retirement fund. At the end of every year,
he deposits ₱5,000. Money is worth 12% compounded annually. How old is he when
the fund has an accumulated value of ₱2M?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

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
Comprehensive The following are three independent situations: 1. K. Herrmann has decided to set up a scholarship fund for students. She is willing to deposit 5,000 in a trust fund at the end of each year for 10 years. She wants the trust fund to then pay annual scholarships at the end of each year for 30 years. 2. Charles Jordy is planning to save for his retirement. He has decided that he can save 3,000 at the end of each year for the next 10 years, 5,000 at the end of each year for Years 11 through 20, and 10,000 at the end of each year for Years 21 through 30. 3. Patricia Karpas has 200,000 in savings on the day she retires. She intends to spend 2,000 per month traveling around the world for the next 2 years, during which time her savings will earn 18%, compounded monthly. For the next 5 years, she intends to spend 6,000 every 6 months, during which time her savings will earn 12%, compounded semiannually. For the rest of her life expectancy of 15 years, she wants an annuity to cover her living costs. During this period, her savings will earn 10% compounded annually. Assume that all payments occur at the end of each period. Required: 1. In Situation 1, how much will the annual scholarships be if the fund can earn 6%? How much at 10%? 2. In Situation 2, (a) How much will Charles have at the end of 30 years if his savings can earn 10%? How much at 6%? (b) If Charles expects to live for 20 years in retirement, how much can he withdraw from his savings at the end of each year if his savings earn 10%? How much at 6%? (c) How much would Charles need to invest today to have the same amount available at the time he retires as calculated in Situation 2(a) at 10%? How much at 6%? 3. In Situation 3, how much will Patricias annuity be?
You have Php100,000 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account?
2. a man invests P 10,000 now for the college education of his 2 year old son. If the fund earns 14% effective, how much will the son get each year starting from his 18th to the 22nd birthday?
A man invests P10,000 now for the college education of his 2-year old son. If the fund earns 14% effective, how much will the son get each year starting from his 18th to the 22nd birthday?
A young man has decided to go into business at age 40. He wishes to accumulate P200,000.00 at that age. On his twenty-fifth birthday, he deposits a certain amount and will increase the deposit by 10% each year until the 40th year. If the funds can be invested at 9.6% compounded annually, how much should his initial investment be?
You have Php100,000 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account? SHOW MANUAL SOLVING
In order to save for her high school graduation, Marie decided to save ₽200 at the end of each month. If the bank pays 0.250% compounded monthly, how much will be her money by the end of 6 years? A. ₽12,507.02 C. ₽14,507.02 B. ₽13,507.02 D. ₽15,507.02 _____ 2. How much should be invested in a fund each year paying 2% compounded annually to accumulate ₽100,000 for 5 years? A. ₽19,215.84 C. ₽21,215.84 B. ₽20,215.84 D. ₽22,215.84
A new employee puts 4% of his salary of $65,000 into a retirement account, and his employer matches this, also putting 3% into the account. The money is invested in a diversified stock fund. His salary increases 2.5% per year. (a) What is the value of the account after 10 years? (b) What is the value of the employer’s matching funds? (c) How much will be in the account after 40 years?
A young student 22 years old has just graduated from college. She accepts a good job and desires to establish her own retirement fund. At the end of each year thereafter she plans to deposit P2,000 in a fund at 15% annual interest. How old will she be when the fund has an accumulated value of P1,000,000?
Jack Walter recognizes the value of saving part of his income. He has set a goal to have $30,000 in cash available for emergencies. How much should he invest semiannually to have $30,000 in five years if the sinking fund he has selected pays 6% annually, compounded semiannually?
A young woman, 22 years old has just graduated from college. She accepts a good job and desires to establish her own retirement fund. At the end of each year thereafter she plans to deposit P2,000 in a fund at 15% annual interest: How old will she be when the fund has a cumulated value of P1,000,000? Include the cashflow diagram. Ans. 53 years old