Kindly answer last three parts of Question 1. (d, e, f) 1. The following are exercises in future (terminal) values:a. At the end of three years, how much is an initial deposit of $100 worth, assuming acompound annual interest rate of (i) 100 percent? (ii) 10 percent? (iii) 0 percent?b. At the end of five years, how much is an initial $500 deposit followed by five year-end,annual $100 payments worth, assuming a compound annual interest rate of (i) 10 per-cent? (ii) 5 percent? (iii) 0 percent?65c. At the end of six years, how much is an initial $500 deposit followed by five year-end,annual $100 payments worth, assuming a compound annual interest rate of (i) 10 per-cent? (ii) 5 percent? (iii) 0 percent?d. At the end of three years, how much is an initial $100 deposit worth, assuming a quar-terly compounded annual interest rate of (i) 100 percent? (ii) 10 percent?e. Why do your answers to Part (d) differ from those to Part (a)?f. At the end of 10 years, how much is a $100 initial deposit worth, assuming an annualinterest rate of 10 percent compounded (i) annually? (ii) semiannually? (iii) quarterly?(iv) continuously?

Future Value is the worth of investment in the future period at the given interest rate. Keeping…

Answered: d. At the end of three years, how much…

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 13E

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You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Define the stated (quoted) or nominal rate INOM as well as the periodic rate IPER. Will the future value be larger or smaller if we compound an initial amount more often than annually—for example, every 6 months, or semiannually—holding the stated interest rate constant? Why? What is the future value of $100 after 5 years under 12% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding? What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 12%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?

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