$400 is deposited at the end of each month for eight years. For the first five years, the rate is 3% monthly, and for the last three years, the rate is 5% monthly. How much is in the account after the eight years?

$400 is deposited at the end of each month for eight years. For the first five years, the rate is 3% monthly, and for the last three years, the rate is 5% monthly. How much is in the account after the eight years?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 25P

See similar textbooks

Related questions

Q: A company deposits $10,000 in a bank at the beginning of each year for 20 years. The account earns…

A: Effective Annual Rate is a modified rate of return where it considers the compounding effect.…

Q: Ms. Simms made deposits of $540 at the end of every three months into a savings account. For the…

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

Q: Deposits of $1000 are made semiannually into an account which earns 8% semiannually. If the deposits…

A: given data $1000 deposit are made semiannually for 9 years it earns 8% compounding interest…

Q: Deposits are made at the end of years 1 through 7 into an account paying 6% per year interest. The…

A: Future value is the worth of any asset or any sum of money at a future date when such asset or…

Q: If money is worth 8% annually, what annual payment is required to raise ₱ 18,811 after 2 years if…

A: Future Value of Annuity Due = (1 + r) x P x [{(1 + r)^n} - 1] / r

Q: Sixty monthly deposits are made into an account paying 8% nominal interest compounded monthly. If…

A: We need to use future value of ordinary annuity formula to calculate monthly payment PMT =FVn(1+r)n…

Q: 10,000 was deposited in the bank every end of the year for 10 consecutive years. Then the sum of all…

A: In this we need to calculate the future value factor and find out the future value of sum.

Q: $10,000 is borrowed at 10% a year interest for five years. At the end of each year, the borrower…

A: Hence, payment made for year 1 is $3,000, year 2 is $2,400, year 3 is $1,920, year 4 is $1,536 and…

Q: Sixty monthly deposits are made into an account paying 6% nominal interest compounded monthly. If…

A: FV of annuity = P * [(1+r)^n-1] / r Where, P = amount of each deposit r = rate of interest per…

Q: • You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment…

A: Future value = Annuity * FVAF ( rate, years ) * FVIF ( rate, years )

Q: Commercial bank pays 12% interest and compounds quarterly. If 1000 are initially, how much shall it…

A: Computation:

Q: $10,000 is borrowed at 10% a year interest for five years. At the end of each year, the borrower…

A: Given that the initial borrowed amount is $1000, interest rate is 10% for 5 years and at the end of…

Q: What is the final amount of $2696 payable every three months for 5 years and 9 months, if money is…

A: Here, Quarterly Payment is P2696 Time Period is 5 years and 9 months Time Period in Quarters (n)…

Q: The owner of Sebastopol Tree Farm deposits $450 at the end of each quarter into an account paying…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: You place £1,000 on deposit at an annual interest rate of 10% and make regular contributions of £250…

A: Solution:- When an amount is deposited somewhere, it earns interest on it. The amount initially…

Q: At the beginning of each quarter, P36,000 is deposited into savings account that pays 6% compounded…

A: Quarterly deposits (D) = P36,000 Interest rate = 6% Quarterly interest rate (r) =…

Q: In three years, a person will begin making quarterly deposits of $45 in an account that pays 10%;…

A: Annuity refers to series of annual payment which are paid or received at start or end of specific…

Q: The company sells products to a customer for $60,000 and will receive $15,000 at the end of the…

A: Time value of money is the concept that states that the value of money have more worth than the same…

Q: A $10,000 loan is scheduled to be repaid in equal monthly installments at the end of each month for…

A: To Find: Additional Interest paid

Q: How much must be deposited at the end of each month for six year to accumulate $3250.00 at 5%…

A: Using excel PMT function

Q: What sum of money must be deposited at the end of every 3 months into an account paying 3.7%…

A: Amount that need to be deposited in in 3moths can be calculated using the formula of the future…

Q: If the interest is deposited into a non interest bearing account B, what is the balance in account B…

A: The first investment is effectively a payout annuity where the interest amount is withdrawn each…

Q: If $2500 is deposited at the end of each quarter in an account that earns 5% compounded quarterly,…

A: Annuity is a stream of recurring cashflow at regular interval for fixed period at specific rate.…

Q: Five years ago, $12, 000 was deposited into a savings account that provides an interest of 6.5%…

A: A savings account is a deposit account opened with banks and other financial institutions. The…

Q: How much must be deposited at the beginning of each quarter in an account that pays 5% compounded…

A: In this question payment per quarter has to be find out. Future value , rate of return and number of…

Q: $480 is deposited at the beginning of every 6 months into a savings account. This will continue for…

A: An account where deposit made by accountholder is credited and credit balance is added with interest…

Q: Velma deposits $2,534 at the end of each quarter, increasing the deposit by $147 per quarter. How…

A: The timing of cash flow is taken into account by discounting them. This is partly due to the effect…

Q: the beginning of each month, $200 is deposited into a retirement fund. The fund earns 6% annual…

A: Compound Interest: It is the amount which is included in the principal amount year to year till its…

Q: 1000 dollars is deposited into an account at the beginning of the year and the value at the end of…

A: GIVEN, PRESENT VALUE=$1000 future value=$1276.30 n=5

Q: 100 is deposited into an account at the end of each 3-year period for 36 years. The accumulated…

A: Annual effective rate is the real rate at which the money deposited grows.

Q: Beginning in January, a person plans to deposit $100 at the end of each month into an account…

A: Using excel FV function

Q: What is the value of the account at the end of 9 years?

A: Depositing equal amounts at the end of the period for a fixed time period is in the form of an…

Q: what amount must be deposited now in order to withdraw 2,000 at the beginning of each month for 3…

A: Here, Withdrawal Amount needed (PMT) is 2,000 Time Period of Withdrawal (n) is 3 years Interest Rate…

Q: Find the final amount of money in an account if $8,900 is deposited at 7% interest compounded…

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

Q: How much must be deposited at the beginning of every six months in an account that pays 4%…

A: The amount which is deposited at the beginning of each period is called as annuity due. The period…

Q: For 8 years, $52 is deposited each week into an account that earns 2.1% interest, compounded weekly…

A: This question has two parts, First - $300 compounding every week for 8 years which is simple…

Q: Deposits are made at the end of years 1 through 7 into an account paying 5% per year interest. The…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: What deposit made at the beginning of each month will accumulate to $120,000 at 8% compounded…

A: An annuity is the fixed payment that an investor receives from an investment or fixed deposits made…

Q: The owner of Oak Hill Squirrel Farm deposits $2,000 at the end of each quarter into an account…

A: Quarterly deposit (P) = $2,000 Interest rate = 1.5% Quarterly interest rate (i) = Interest rate/4 =…

Q: A man deposits 320 at the end of each three months in an account paying 6% converted quarterly. In…

A: No of deposits required can be calculated using the formula of the future value of annuity.

Q: Beatrice deposits $75 at the end of each month into an account earning 4.75% compounded monthly. How…

A: Compound interest refers to the interest accrued not only on principal amount but also on the…

Q: RM100 is deposited every month in an account that pays 12% compounded monthly for two years. After…

A: Answer - Given, R = 100 r = 12% t1 = 2 i = 12%/ 2 =1% n1= 12(2) = 24 n2 = 12(3) = 36

Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Inputs

VIEW

Future Value at end of 5 years

VIEW

Future Value at end of 8 years

VIEW

Step by step

Solved in 3 steps

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 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?
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
For 8 years, $52 is deposited each week into an account that earns 2.1% interest, compounded weekly (52 times a year). The account currently has $300 in it. How much will be in the account after 8 years?
An account pays 4 percent interest (yearly effective). 10,000 dollars is deposited into that account at the end of the first year, and the deposits increase by 2000 dollars each year (12,000 is the second year’s deposit, etc.) What is the amount in the account at the end of 20 years and what is the present value?
$10,000 is being deposited at the end of each year into an account that pays nominal interest of 12% compounded monthly. How much money is in the account immediately after the 5th deposit of $10,000?
10,000 was deposited in the bank every end of the year for 10 consecutive years. Then the sum of all deposits and interest was left to earn. The same rate of interest of 8%, net of taxes, compounded annually. What would be the sum of all deposits and interests at the end of 15 years?
Sixty monthly deposits are made into an account paying 8% nominal interest compounded monthly. If the subject of these is deposits is to accumulate P350,000 by the end of the fifth year, what is the amount of each deposits?
If for the next 40 years you place $3,000 in equal year-end-deposits into an account earning 8% per year, how much money will be in the account at the end of that time period?
Nancy deposits $7,000 into an account that credits interest at the end of each year. The effective annual interest rate is 5%, but starting with the fifth year the interest rate increases to 7%. What is the accumulated value of the account after 10 years?
How much must be deposited at the beginning of every six months in an account that pays 5% compounded semi-annual, so that the account will contain $20,000.00 at the end of 3 years?
At the start of this year, $10,000 was deposited into an account that earns an effective annual interest rate of 4% per year for 10 years. Another $1,000 will be deposited at the end of each year for years 1-10, also earning 4% per year. All interest earned remains in the account. How much money is in this account at the end of year 10?
Sixty monthly deposits are made into an account paying 8% nominal interest compounded monthly. If the subject of these is deposits is to accumulate P300,000 by the end of the fifth year, what is the amount of each deposit? Show step by step.