Answered: How much would tom’s initial balance…

Business

Accounting

How much would tom’s initial balance have to be? show work and formula

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 11PROB

See similar textbooks

Related questions

Q: If you have $20,000 in an account earning 8 percent annually, what constant amount could you…

A: Annuity Payouts: Annuity payouts are the withdrawal payments that are fixed in amount and for a…

Q: ohn wants to retire with $10,000 per month, how much principal is necessary to generate this amount…

A: in this we have to calculate Present value of perpetuity.

Q: You wish to save $30,000 by making $1000 deposits at the end of each month. If the bank pays 4%…

A: Dear student, we need to use NPER and FV formulas in excel to solved this problem.

Q: Your friend plans to invest $1,000 per month into an account expected to have an effective annual…

A: Here, EAR is 6.2% Monthly payment (PMT) is $1,000 Required Amount (FV) is $100,000

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: Daysha would like to save $460 at the end of every three months for the next 6 years in a savings…

A: As per the given information: Interest rate - 1.92% compounded annually Amount deposited at the end…

Q: You plan to invest $1,200 at the end of year 1, $2,000 at the end of year 2, and $3,700 at the end…

A: Given data; Amount deposited at the end of year 1 = $1200 Amount deposited at the end of year 2 = $…

Q: How much (in dollars) is needed in an account that earns 10.8% compounded monthly to withdraw $1,000…

A: The formula used as follows: Present value=A1-11+rnr

Q: how much must brix save in his account at the end of each month in order to have 125,000.00 at the…

A: Monthly Compounding Interest Rate = 5.88%/12 = 0.49% per month Time Period = 5 years × 12 = 60…

Q: The Carrolls have $100,000 in a bank. If they get 5% compounded monthly and withdraw $5000 at the…

A: Given Data: Amount in Bank = $100,000 Interest Rate = 5% Monthly withdrawal: $5000

Q: if you owe $35,000 payable at the end of eight years, what amount should your creditor accept in…

A: Amount due after 8 Years (FV) = $ 35000 Interest rate (r) = 13% Period (n) = 8 Years

Q: Laura wants to accumulate $150,000 in her bank account by depositing $1000 at the beginning of each…

A: Given: Future value FV = $150000 Payment at the beginning of each month "PMT" = $1000 Interest rate…

Q: mahle would like to save $5,750 at the end of every month for the next 5. ccount earning 5.8%…

A: Future value of annuity includes the amount being deposited and the interest accumulated over the…

Q: How much should Ryan have in a savings account that is earning 2.50% compounded monthly, if he plans…

A: Present Value of Annuity: It represents the present worth of the future cash flows stream and is…

Q: Susan plans to make an investment today which promises to return to her $3,000 each year for ten…

A: Using excel PV function

Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Gertrude wants to make $500 monthly withdrawals for 10 years from an account which pays 4%…

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

Q: Howard is saving for a long holiday. He deposits a fixed amount every month in a bank account with…

A: Time value of money is the concept that says the monthly savings will increase portfolio value at…

Q: Suppose you invest $140 a month for 3 years into an account earning 8% compounded monthly. After 3…

A: Future value of ordinary annuity(cash flow due at the end of year) can be calculated by using this…

Q: Stuart Daniels estimates that he will need $26,000 to set up a small business in 7 years. How much…

A: The present value of a cash flow is the current worth of a cash flow at a certain rate of interest…

Q: Suppose I just opened an account today, and it has a $0 balance. Starting next month I will make…

A: Data given: FV= $ 1,000,000 Interest rate= 9% compounded monthly Interest rate per month=…

Q: How many years will it take to reach your goal?

A: Year Opening Balance ($) Interest % Interest Amount ($) Additional Deposit ($) Balance at year end…

Q: If a person spends $10 a week on coffee (assume $500 a year), what would be the future value of that…

A: In the given question we require to compute the future value.

Q: Alicia has $350,000 saved for retirement in an account earning 3.2% interest, compounded quarterly.…

A: Present Value of Annuity = Annuity Amount * [ {1 / ( 1 + periodic interest rate ) } + {1 / ( 1 +…

Q: In 20 years, Hannah would like to have $30,000 in an account that earns 4.2% compounded monthly. How…

A: In the given question we need to compute the Deposit today so that Hannah will have $30000 at the…

Q: Can you please help me work this problem out in detail? Carol is depositing $250 into an account…

A: The amount deposited every six months is $250. The total number of deposits in 5 years would be 10.…

Q: Suppose you invest $120 a month for 5 years into an account earning 9% compounded monthly. After 5…

A: Computation:

Q: The Weidmans want to save $25,000 in 4 years for a down payment on a house. If they make monthly…

A: FORMULA FOR MONTHLY PAYMENT: PMT = P×rm1-1+rm-m×n p = principal r= rate of interest m = frequency of…

Q: Aaron is planning to get a loan for a house costing $320,000. He plans to make a downpayment of 15%…

A: A mortgage is a loan provided by the bank to the individual to buy the house. An individual can…

Q: Jun has decided to save money roughly P25 per week. Suppose he makes weekly deposits of this money…

A: Compounding is also termed as an interest on interest which means that a company calculates interest…

Q: Bob has saved $ 5000 towards the purchase of a car costing $ 7000. For how many months does Bob need…

A: When the interest is computed on the principal amount along with all the previously accumulated…

Q: Bria has $450,000 saved for retirement in an account earning 2.4% interest, compounded weekly. How…

A: Future Value:-It is the value of an investment at a future date based on the growth rate. It helps…

Q: money is in your account after 16 months?

A: Given: Investment amount = $3000 APR = 3% compounded monthly Since, Interest is compounded monthly,…

Q: You have $29,307.61 in a brokerage account, and you plan to deposit an additional $4,000 at the end…

A: The number of years required to accomplish the goal can be find out by using the future value of…

Q: You deposit $35,000.00 in an account that pays 6% compounded quarterly and immediately start making…

A: Amount Deposited = $ 35,000 Rate of Interest = 6% compounded quarterly

Q: Assume you put $400 per month into a retirement account for 14 years, and the account has an APR of…

A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: Suppose you invest $140 a month for 3 years into an account earning 8% compounded monthly. After 3…

A: The future value is the future worth of the amount that will be paid or received at future.

Q: An engineer who is planning his retirement has decided that he will have to withdraw ₱10 000 from…

A: Retirement funds are the funds that are accumulated by an individual in his/her pre-retirement life…

Q: Your best friend is saving $1,800.00 and will earn 0.17 percent per month. Determine the number of…

A: Compounding is a way to find the FV of present amount by considering appropriate rate or CVF for the…

Q: Mr. Gordon plans to invest $600 at the end of each month in an account that pays 12%, compounded…

A: a) An ordinary annuity may be a set of identical installments paid over an indicated sum of the time…

Q: Gary has decided to save RM150 a month for 4 years. How much will be the balance in the account if…

A: In compound interest money grow with time as there is interest on the interest.

Q: Craig is saving for a $3500 sound system. He plans to deposit $175 at the end of every 3 months into…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Troy has a retirement account worth $1,250,000 . The account draws 4.5% compounded monthly. A .…

A: An annuity is a financial instrument that allows you to set aside a certain amount of money and…

Q: Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly,…

A: Here we have to use the concept of annuity and concept of time value of money to find the present…

Q: Kurt wants to have RM25,000 in an investment account four years from now. The account will pay 0.2…

Question

Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be? show work and formula

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

Knowledge Booster

Learn more about

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

Similar questions

How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
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
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
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.