Answered: How much would you need to deposit in…

How much would you need to deposit in an account now in order to have $6000 in the account in 5 years? Assume the account earns 6% interest compounded monthly.

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: You deposit $5000 in an account earning 2% interest compounded monthly. How much will you have in…

A: Deposit (P) = $ 5000 Interest rate = 2% Monthly interest rate (r) = 2%/12 = 0.166666666666667%…

Q: How much would you need to deposit in an account now in order to have $3,500.00 in the account in 20…

A: a. Future value = Amount + (Amount*Rate*Periods) $3,500 = Amount + (Amount *8.35%*20) $3,500 =…

Q: How much would you need to deposit in an account now in order to have $6000 in the account in 10…

A: Given information Future Value = $6000 Time Period =10 years *12= 120 periods(As periods are…

Q: Suppose you want to have $500,000 for retirement in 25 years. Your account earns 6% interest. How…

A: The future value of an annuity is the future worth of a series of cash flows at a certain rate of…

Q: If you deposited $5000 in a bank that offers 12% annual interest rate, if the bank compounds the…

A: Deposit=5000Annual interest rate=12%Number of years=5years

Q: How much money will be in the bank account at the end of 4 years if $5000 is deposited at the end of…

A: Future value: It implies to the value that an investment will carry at some point of time in future…

Q: How much would you need to deposit in an account now in order to have $3000 in the account in 15…

A: Using excel PV function

Q: How much would you need to deposit in an account each month in order to have $10,000 in the account…

A: The future value of the annuity is the total value of all the payments which is occurred regularly…

Q: How much should you invest into an account with 3.2% interest compounded quarterly if you want to…

A: Given that;Payment amount is $1000 Interest rate is 3.2%, as it is compounded quarterly, the rate we…

Q: You deposit $4000 in an account earning 8% interest compounded monthly. How much will you have in…

A: Given information ; P = 4000 r = 8% or 0.08 Compounded monthly so n = 12 t = 15 years

Q: How much would you need to deposit in an account now in order to have $2000 in the account in 10…

A: Here, Future Value is $2,000 Compound Period is Monthly Interest Rate is 7% Therefore, Monthly…

Q: Suppose you want to have $600,000 for retirement in 25 years. Your account earns 6% interest. How…

A: Using excel PMT function = PMT(rate,nper,pv,fv)

Q: You deposit $6000 in an account earning 5% interest compounded monthly. How much will you have in…

A: Future Value is the compounding of present value at the specified rate of interest.

Q: How much would you need to deposit in an account right now in order to have $2,000 in the account in…

A: Amount = $2,000 = A Time period = 10 years = T Interest rate = 2% = R Compounded monthly where it…

Q: Find how much money needs to be deposited now into an account to obtain $40,000 in 5 years if the…

A: Future value (FV) = $40,000 Period (n) = 5 Years Interest rate (r) = 7%

Q: How much would you need to deposit in an account each month in order to have $10,000 in the account…

A: formula to be used = Future value=PMT(1+r/n)n*t-1)/r/n PMT= Monthly payment R= interest rate N=…

Q: How much should you deposit at the end of each quarter into an account that pays 4.4% annual…

A: The principle refers to the amount you committed to repay at the outset. The expense of borrowing…

Q: You deposit $3000 each year into an account earning 5% interest compounded annually. How much will…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: How much must I deposit into an account every month to have $1,500,000 in 15 years at a rate of 7%…

A: A recurring deposit is a special type of term deposit offered by banks which help people with…

Q: You deposit $4000 in an account earning 3% interest compounded monthly. How much will you have in…

A: The amount after 10 years will be the future value of the initial deposit.

Q: How much would you need to deposit in an account now in order to have $6,000 in the account in 8…

A: In order to solve this question one has to solve for the present value to know how much to save into…

Q: How much would you have to pay into an account at the beginning of every six months to accumulate…

A: The Future Value of Annuity Due refers to the concept which determines the sum total of all the cash…

Q: You deposit $4000 in an account earning 5% interest compounded monthly. How much will you have in…

A: Given: Interest rate = 5% Present value = $4,000 Period = 10 years

Q: How would you need to deposit in an account now in order to have $3000 in the account in 5 years?…

A: Given, Future Value = $3000 Time period = 5 years Interest rate = 7% Compounding = monthly

Q: You deposit $1000 each year into an account earning 6% interest compounded annually. How much will…

A: Ordinary Annuity is way of payment where payment happens at the end of each period.

Q: You deposit $6000 in an account earning 5% interest compounded monthly. How much will you have in…

A: When a principal amount grows with interest over a time period, it is known as the future value.…

Q: You deposit $1000 each year into an account earning 4% interest compounded annually. How much will…

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

Q: You deposit $5000 in an account earning 5% interest compounded continuously. How much will you have…

A: Future Value is the value of current investments at a certain future date at the assumed…

Q: You deposit $500 each month into an account earning 3% interest compounded monthly. Round to the…

A: We need to use future value of annuity formula to calculate money in account after 25 years Future…

Q: You deposit $400 each month into an account earning 3% interest compounded monthly. Round to the…

A: Monthly deposit (m) = $400 Monthly interest rate (r) = 0.0025 (i.e. 0.03 / 12) Monthly period (p) =…

Q: How much will I need to deposit into an account to have $6,500,000 in 10 years earning 5 %…

A: The provided information are: Future value (FV) = $6500000 Interest rate (r) = 5% Number of years…

Q: How much would you need to deposit in an account now in order to have $6000 in the account in 15…

A: PV = FV/(1+r)^n

Q: What is the future value of $1,100 placed in a savings account for 4 years if the account pays 7%…

A: Following information is given in the question: Present value (Investment today) = $1100 Time period…

Q: If you initially invest $3500 in an account that earns 4.7% interest compounded daily, how much will…

A: Initial investment (PV) = $3500 Interest rate (r) = 4.7% Number of compounding per year (m) = 365…

Q: If you deposit 10000 in a bank account that pays 10% interest annually, how much will be in your…

A: The amount in the account after 5 years is future value of the deposited amount. Future value can be…

Q: You deposit $6000 in an account earning 4% interest compounded monthly. How much will you have in…

A: Future Value = Present Value * (1+r)^nWhere,r = rate of interest per period i.e. 4%/12 =0.333%n =…

Q: How much would you need to deposit in an account now in order to have $6000 in the account in 15…

A: Present Value is the today's value of a future amount at a given interest rate for a specified time…

Q: Suppose you want to have $800,000 for retirement in 20 years. Your account earns 6% interest. How…

A: Solution:- When an equal amount is deposited each period, it is called annuity. Future value of…

Q: You deposit $4000 in an account earning 7% interest compounded continuously. How much will you have…

A: Future Value = Present Value * e^(rt) Where, r =rate of interest i.e. 7% t = time i.e. 15

Q: You deposit $6000 in an account earning 2% interest compounded monthly. How much will you have in…

A: FV is the future worth of cash flow that have occurred in the past or present.

Q: You deposit $200 each month into an account earning 5% interest compounded monthly. How much will…

A: Future worth of the amount is referred as the worth of the currently deposited amount at some future…

Q: If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your…

A: In the given question we require to compute the future value from following details: Present value =…

Q: How much money should be invested in an account that earns 9.5% interest, compounded monthly, in…

A: It can be calculated using following formula PV = FV / (1 + r / n)nt Where, PV = Present value FV =…

Q: You deposit $3000 in an account earning 3% interest compounded monthly. How much will you have in…

A: Present value is $3,000. This amount earns interest at 3% interest rate that compounds monthly.…

Q: You have decided to put $130 in a savings account at the end of each month. The savings account…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: If you deposit $2000 in an account that pays 3.6% with quarterly compounding, what is the balance…

A: given, pv = $2000 r = 3.6% m =4 n= 6

Q: How much would you need to deposit in an account now in order to have $4000 in the account in 5…

A: We need to use compound interest formula given below to solve this problem. A=P(1+i)n Where A= Final…

Q: You deposit $4000 in an account earning 2% interest compounded daily. How much will you have in the…

A: Given, Deposit amount = $4000 Interest rate = 2% Compounding = Daily

Q: You deposit $6000 in an account earning 6% interest compounded monthly. How much will you have in…

A: Computation as follows:

Question

How much would you need to deposit in an account now in order to have $6000 in the account in 5 years?
Assume the account earns 6% interest compounded monthly.
Question Help: D Video
Submit Question

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

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 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

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 $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.
Use Future Value and Present Value Tables to Apply Compound Interest to Accounting Transactions Kristen Quinn makes equal deposits of $500 semiannually for 4 years. Required: What is the future value at 8%? (Note: Round answers to two decimal places.)
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
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
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?