Answered: Calculate the future worth (in year 11)…

Calculate the future worth (in year 11) of the following income and expenses, if the interest rate is 8% per year: Year Income, $ Expense, $ 0 12,000 3,000 1-6 800 200 7-11 900 200

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 3CE

See similar textbooks

Related questions

Q: Find the present and future values of an income stream of $2000 a year for 17 years. The interest…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment.…

A: Information Provided: Principal = $8000 TIme = 4 years Nominal rate = 11% Compounding = Annually

Q: Calculate the EUAC of a company If present worth is 5000$ for 6 years at interest rate of 11%.…

A: The answer for the multiple choice question and relevant working are presented hereunder : Present…

Q: Using the annuity formula find the total profit earned in the first 10 years where the company…

A: This is a case of a growing annuity. Hence we will use the formula of present value of growing…

Q: Find the future value (A) of each of the following investments. Use an exact interest year where…

A: The future value formula A = P + I Where P=Principal and I=Interest Interest(I)=Prt Where…

Q: An investor put his money in an investment earning 10 1/2% simple interest rate per annum. If his…

A: simple interest formula: A=P×1+RT given, p 12.30 MILLION R=10.5% T=15 / 12 YEARS

Q: What is the present value of $2,000 received today, $2,500 received at the end of each of the next…

A: Present value of cashflow for any year = Cashflow for that year/(1+ discount rate)^time Cashflow for…

Q: Find the future worth in year 10 of $50,000 in year 0 and amounts increasing by 15% per year through…

A: Future worth: It is the future value of the present amount compounded at a rate of interest over a…

Q: amount

A: Compound interest formula: Formula for calculating PV is: PV = FV/(1+i/n)^nt where FV is the future…

Q: calculate the ending value in the 4th year if the initial cost of assets is 50000$ with macrs table…

A: Answer Cost of assets = $50,000

Q: Given below are the future value factors for 1 at 10% for one to five periods. Interest is…

Q: The rate of earnings is 10% and the cash to be received in three years is $10,000. Determine the…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Find the annual worth in years 1 through 10 of an investment that starts at $8000 in year 1 and…

A: PV of single growing cashflow = (C(1+g)n)/(1+r)n Where C = cashflows = $8000 r = interest rate = 10%…

Q: (a) Calculate the perpetual equivalent annual worth in future dollars for years 1 through ∞ for…

A: (a) The calculation is shown as: The formulae snip is annexed below:

Q: You have $1,500 to invest today at 7% interest compounded annually. a. Find how much you will have…

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

Q: The income stream b = (1000, 1500, 2500, 4000) consists of payments made at the end of the next four…

A: The present value is calculated by discounting the cash flows at an appropriate discount rate for a…

Q: olur? 06:031370160 i= %7.8 -%3,9 2 3 A=500 TL/yıl 2511 2887 2200 2776

A: Cash Outflows: Year Cash Flow 0 -500 1 -500 2 -500 3 -500 4 -500 Annual Interest…

Q: Evaluate the net present value of following streams of income: a. $1000 per year at an interest rate…

A: Present Value of Perpetuity = Perpetual Income / Interest Rate

Q: Catten, Inc., invests $163,170 today earning 7% per year for nine years. Use Table B.2 to compute…

A: Future value: It can be defined as the value of an asset to be received by an investor at a future…

Q: 1. Determine present worth and the accumulated amount of an annuity consisting of 6 payments of…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: How much money was deposited 35 years ago at 10% per year interest if it is sufficient to provide a…

A: Computation:

Q: Find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The…

A: The formula used for calculating G is:

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: Principal =13000 interest rate =5% quarterly interest =1.25 Period 8 years =32 quarters

Q: If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the…

A: Present value amount = Cash to be received in two years x present value of $1 at compound interest…

Q: For a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1…

A: Present sum = 620000 i = 12% inflation rate = 5% n=7 years PW = 620000(A/P,12%,7) =620000(0.2191177)…

Q: Please calculate the initial amount needed to have $10,000 after 8 years at 6% compounded quarterly…

A: Here, Future Value Required is $10,000 Compounding Period is quarterly i.e 4 periods in a year…

Q: investment

A: Formula to calculate compound interest is: A = P(1+r/n)^nt where A is the final amount, P is the…

Q: Suppose that you invest $5,000 at 6% interest, compound quarterly, for 5 years. use Table 11-1 to…

Q: You are investing the following amounts at the end of each of the following three years. How much…

A: Year 1 Amount (C1) = $2,000 Year 2 Amount (C2) = $4,000 Year 3 Amount (C3) = $6,000 r = Return i.e.…

Q: What is the present value of receiving $2,500 at the end of each year for 5 years, assuming 7%…

A: As it is the case of annuity due, thus, the first table will be used @7%, 5 years.

Q: Match the correct answer for the following questions v The present worth of $400 in year 1 and…

A: 1) First year amount (A1) = $400 Increase of $30 every year till year 5 r = 12%

Q: An investor is presented with an investment proposal which produces a continuous income stream of…

A: Future Value is referred as the current asset value that will be changed at future date on the basis…

Q: What is the future value of the 10% savings from earnings of $187.45 if it earns 5% annual interest,…

A: Monthly savings, A = 10% of earnings of $ 187.45 = $ 18.745Interest rate per period = Interest rate…

Q: The following table presents a series of income and expenses. Assume an interest rate of 5% per…

A: Present value (PV) is the amount which is equivalent to some higher future amount in case of…

Q: What is the future value of $5,000 invested for 4 years at 7.5% interest compounded continuously?

A: Future value is what money invested today will become over a time at a rate of interest

Q: If $10,000 is invested in a certain business at the start of the year, the investor will receive…

A: Basic Details: 1. Amount Invested = $10000 2. Annual Cash Flow = $3000 3. Term = 4 Years 4. Interest…

Q: questions. What single investment made today, earning 12% annual interest, will be worth $6,000 at…

A: Time value of money (TVM) means that the money received in the present will have more value than…

Q: If you invest $2,000 per year for 9 years and earn a 5% return on your investment during that…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: a. Calculate the amount deposited 1 year ago to have $1000 now at an interest rate of 5% per year.b.…

A: Interest is measured as a percentage of the amount of the loan (or deposit), charged periodically to…

Q: The Present Worth of $2200 in year 1 and amounts increasing by $500 per year thru year 5 at an…

A: Given information: Cash flow in year 1 is $2,200, Cash flow increases by $500 Interest rate is 13%,…

Q: If you deposit $2600 in order to get annual revenues each year up to 7 years, at a rate of return…

A: Capital recovery factor is annuity of the investment made today over the period of time at the given…

Q: An investment pays $200 at the end of Year I. $250 at the beginning* of Year 2. $387 at the end of…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: Complete the following using compound future value. Time 13 years, Principal $16,800, Rate 2%,…

A: The amount that a present investment will gain in value over time when kept in a compound interest…

Q: Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment.…

A: Principal = $ 23000 Period = 13 Years Annual interest rate = 5%

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

Calculate the future worth (in year 11) of the following income and expenses, if the interest rate is 8% per year:

Year Income, $ Expense, $

0 12,000 3,000

1-6 800 200

7-11 900 200

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

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636
Using the following partial table of present value of $1 at compound interest, determine the present value of $25,000 to be received four years hence, with earnings at the rate of 10% a year. Year 6% 10% 12% 1 .943 .909 .893 2 .890 .826 .797 3 .840 .751 .712 4 .792 .683 .636 a.$22,725 b.$15,900 c.$17,075 d.$19,800
Using the formula for the time value of money, if a sum $15,000 is invested for one year at 10% interest compounded quarterly, the future value of that money is: a. $16557 b. $16600 c. $16500 d. $18000
Consider the following income statement for WatchoverU Savings Inc. (in millions): (LG 19-1) What is WatchoverU’s expected net interest income at year-end? What will be the net interest income at year-end if interest rates rise by 2 percent?
Given below are the future value factors for 1 at 10% for one to five periods. Interest is compounded annually at 10%. Periods Future Value of 1 at 10% 1 1.100 2 1.210 3 1.331 4 1.464 5 1.611 If $ 16200 is deposited in a savings account today, what amount will be available three years from today? $ 16200 × 1.100 × 3 ($ 16200 × 1.100) + ($ 16200 × 1.210) + ($ 16200 × 1.331) $ 16200 × 1.331 $ 16200 ÷ 1.331
Find the future worth in year 10 of $50,000 in year 0 and amounts increasing by 15% per year through year 10 at an interest rate of 10% per year
What is the value of before tax equity reversion if sales price is Tk. 8900000, selling expense is 20%, and loan of tk. 938000, 28 years is paid off after 9 years, where rate of interest is 10.5% where monthly installment is tk. 8671.85? a. 6536989 b. 6264989 c. 5951178 d. 6049809
Please calculate this below (incl. the formula):a. What is PV of $100 received in year 10, with 1% discount rate?b. Hans made investment $10 million with interest rate 6% per annum. What is the value of Hans's investment after 4 years and interest compound annually.
If $10,000 is invested in a certain business at the start of the year, the investor will receive $3,000 at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 4% per year? A. $1,068 B. $890 C. $445 D. $1424
If $25,000 is deposited in a 5% savings account and inflation is 3%, what is the value of the account at the end of Year 20 in Year-0 dollars? If the time value of money is 4%, what is the present worth?
If money is worth 12% compounded quarterly and n = 5, compute the present value of the following: (a) P1.00 received monthly in year n. (b) P1.00 received monthly for n years. answer: a) P 7.02b) P 45.08
Using the annuity formula find the total profit earned in the first 10 years where the company earned $245 000 in its first year and expects to increase profits by 15% each subsequent year