If a fund pays 12% compounded annually, what single deposit now will accumulate $12,000 at the end of the 10th year? If the fund pays 6% compounded annually, what single deposit now is required in order to accumulate $6,000 at the end of the tenth year?

If a fund pays 12% compounded annually, what single deposit now will accumulate $12,000 at the end of the 10th year? If the fund pays 6% compounded annually, what single deposit now is required in order to accumulate $6,000 at the end of the tenth year?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

See similar textbooks

Related questions

Q: What equal annual payment must be deposited into a sinking fund to accu- mulate $60,000 in 20 years…

A: Sinking Funds refers to an arrangement of annuity for a definite time period for the accumulation of…

Q: Six annual regular payments of £7,250 are paid into a fund that pays interest of 3.4% per annum.…

A: In stock market, the change in the market rate of interest can be seen. With the change in interest…

Q: How much is in the fund at the end of 12 years, if it accumulated at 5% for the first 8 years, and…

A: Balance in the fund at the end of any period is the amount of money which includes the deposits…

Q: A 15-year, $500,000 loan will be repaid by the sinking fund method. Interest only must be paid at…

A: A sinking fund increases a company's creditworthiness, it allows a small corporation to offer a…

Q: If 14,000 dollars had been invested in the fictious fund on June 30, 1995, then on June 30, 2005 the…

A: A Compound Annual Growth Rate(CAGR) is the method in which we calculate the total return from an…

Q: A company makes fixed annual payments to a sinking fund to replace equipment in five years’ time.…

A: Future Value of Money Required = 200,000 Time Period = 5 years Interest Rate = 10% Future Value…

Q: What equal series of payments must be paid into a sinking fund in order toaccumulate each given…

A: Sinking fund refers to the funds that are kept by the companies aside on periodic basis so that…

Q: You invested $7,000 at the end of each quarter for 8 years in an investment fund. If t balance in…

A: Solution: An amount deposited at end of every period is known as ordinary annuity. The formula for…

Q: a.) How much money must be invested at the end of each quarter for 25 years in a sinking fund that…

A: Here, Future value is 'FV' Present value or investment amount is 'P' Nominal interest rate is 'r'…

Q: To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: Find the interest rate needed to accumulate $45,000 in a sinking fund in 10 years, with annual…

A: A fund that is created to repay a debt or replacement of an asset by putting an equal sum of amount…

Q: The sum of $159,760 is invested at 5.5% compounded monthly for four years. After the four years, the…

A: The present value of annuity refers to the current value of future annuity payments to be paid at a…

Q: A fund of 25000 is to be accumulated by means of deposits of 1000 at the beginning of every year as…

A: Deposits are being done to get a lump-sum return on the periodic amount that has been invested.…

Q: $150,000 is deposited in a fund that pays 5% annual compound interest for 2 years, 3% annual…

A: There are two methods of charging interest on loans. One is the simple interest method and other is…

Q: Ten thousand pesos is deposited annually for 10 years with an annual interest rate of 3.2%, how much…

A: Annual deposit (P) = P10,000 Interest rate (r) = 3.2% Number of annual deposits (n) = 10

Q: You deposit $50,000 into a fund that pays 5% per year compounded annually. You plan to make the…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: In order to accumulate $500,000 after 25 years, calculate the amounts that must be invested at the…

Q: Sevim wants to create a savings of 95,000 TL at the end of 30 years. For this purpose, it plans to…

A: This question had two parts we had to find future value of both parts.

Q: If P20,000 is invested in a fund that pays 10% compounded annually, how much money will be in the…

A: Answer - Part 1 - If P20,000 is invested in a fund that pays 10% compounded annually, how much…

Q: Urgently need. An engineer wishes to set up a special fund by making uniform semiannual…

A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: how many years

A: The $50000 fund is a lump sum amount today. The $6000 withdrawl per year is ordinary annuity. To…

Q: you started making sinking fund deposit of 20000 today. its bank pays 6% compounded semi-annually…

A: Solution Given Present deposit 20000 Rate of interest 6% compounded semiannually…

Q: At the end of every six months for 20 years, it gains value with an annual effective interest rate…

A: In this we have divide whole into two parts. and find out future value at the end of 20 years.

Q: A sinking fund of $100,000 is to be established with equal payments at the end of each half-year for…

A: Present value = $100,000 Time = 15 years ; semi annual period = 30 Rate =10% ; semi annual rate =…

Q: If 1000 pesos was deposited in a fund at the beginning of each 3 months for 10 years and money is…

Q: Your RRSP savings of $52,500 are converted to a RRIF at 4.22% compounded monthly that pays $5,372 at…

A: EXCEL FORMULA:

Q: If $90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of $23,138.32…

A: solution: Let interest rate earned = i Annual withdrawls = $23,138.32 Amount invested (Present value…

Q: What sinking fund payment is required at the end of each 6-month period, at 6% interest compounded…

A: Payment required at end of each 6-year period can be calculated as: = Future Value / Future value of…

Q: At the beginning of each year? ___________ At the end of each year?

A: Information Provided: Funds amount = $300,000 Annual earning rate = 7.75% Term = 25 years

Q: Keeler's Fabrication sets aside $3500.00 at the beginning of every six months in a fund to replace…

A: An annuity is an agreement between you and an insurance agency where you make a single amount…

Q: Calculate the future value of end-of-month payments of $4,000 made for 7 years into an investment…

A: Monthly Payments = $4,000 Time period = 7 years Interest Rate = 5.50% Compounding period =…

Q: You deposit the following at the end of each year into a growth mutualfund that earns 11 percent per…

A: a) Computation of worth of the fund:

Q: sinking fund is generated for the recovery of bond of $1000000 at the end of 25 years. How much…

A: Please refer to the image below.

Q: QuantAlpha fund charges a 12b-1 fee of 1% and maintains an expense ratio of 0.75%. Assume the rate…

A: Value of investment = Invested amount*(1+r)n *(1-annual charges %)n r is rate of return of fund…

Q: You just placed $3000 in a fund expected to earn 12% APR compounded monthly. At that rate, how many…

A: Amount placed now(PV) is $3000 Interest rate Compounded monthly is 12% Monthly interest rate is…

Q: If annual deposits of $1,000 are made into a fund paying 12% interest compounded annually, how much…

A: Present Value of deposits (PV)=$1,000 Interest Rate (r)= 12% compounded annually Time period (n)= 5…

Q: A firm is required to make a payment at the end of each year for 9 consecutive years. The annual…

A: The formula to calculate the present value of future cash inflow is C/(1+r)n, where C is the cash…

Q: In order to have ₱1 million in a fund at the end of 15 years, how much must be deposited in the fund…

A: Amount to be deposited per quarter can be calculated using PMT function in excel. PMT(rate, nper,…

Q: Determine the monthly payment necessary to accumulate $30,000 in a fund paying 6% per year,…

A: The future value is computed by multiplying the present money by the future value annuity factor. In…

Q: A fund is built with annual payments increasing by $1 from $1 to $10 and then decreasing by $1 to…

A: The answer to this question is a Palindromic annuity The formula to be used for solving this is,

Q: Suppose you make equal quarterly deposits of $2,500 into a fund that pays interest at a rate of 5%…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: How much would a business have to invest in a high-growth fund to receive $13,000 every month for 7…

A: An annuity is the total of regular payments made over a period of time at a specific date, at a…

Q: $3000 into the fund. If the investments grew at a rate of 8% per year over the 15 years, how much is…

A: Information Provided: Present value = $10,000 Interest rate = 8% Term = 15 years Annual deposit =…

Q: The sum of P4200 will be withdrawn from a fund at 3-month intervals, the first withdrawal to be made…

A: Solved using Financial Calculator PV = -48,000 FV = 6000 PMT = 4200 I/Y = 7 CPT N = 22.2304…

Q: A pension fund is making an investment of $100,000 today and expects to receive $1,600 at the end of…

A: The internal rate of return is the rate at which the present value of cash inflows is equals to the…

Q: At the beginning of each year, you deposit the following into a growthmutual fund that earns 6…

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

Q: Your RRSP savings of $35,000 are converted to a RRIF at 3.25% compounded monthly that pays $5,100 at…

A: The amount in retirement fund will be depleted after some period of time due to payment and interest…

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

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

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 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?
Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years. What is the NPV using 8% as the discount rate?
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
Amount of an Annuity John Goodheart wishes to provide for 6 annual withdrawals of 3,000 each beginning January 1, 2029. He wishes to make 10 annual deposits beginning January 1, 2019, with the last deposit to be made on January 1, 2028. Required: If the fund earns interest compounded annually at 10%, how much is each of the 10 deposits?
If 1000 pesos was deposited in a fund at the beginning of each 3 months for 10 years and money is invested at 6% compounded quarterly, how much is in the fund at the end of 10 years?
If annual deposits of $1,000 are made into a fund paying 12% interest compounded annually, how much money will be in the fund immediately after the 5th deposit?
If P20,000 is invested in a fund that pays 10% compounded annually, how much money will be in the fund after 3 years? Accumulate P30,000 for 3 years and 6 months at 16% compounded semiannually. What is the compound amount after you invest P22,350 for 5 years and 6 months at 5% compounded semiannually? What is the (a) present value and (b) compound interest earned for 3 years and 9 months of P84,500 that is compounded quarterly at 20% interest? Find the nominal rate which when compounded semiannually and applied to a P50,000 principal will earn an interest of P5,000 after 60 months. In how many months will P10,000 earn a compound interest of P2,000 if money is worth 12% compounded monthly? What effective rate is the equivalent to 15% compounded annually?
) What maximum annual withdrawals will a $300,000 fund earning 7.75% compounded annually sustain for 25 years if the withdrawals are made: At the beginning of each year? ___________ At the end of each year? __________
On January 1, you deposited $6,000 in an investment account. The account will earn 10 percentannual compound interest, which will be added to the fund balance at the end of each year.Required (round to the nearest dollar):1. What will be the balance in the account at the end of 10 years?2. What is the interest for the 10 years?3. How much interest revenue did the fund earn in the first year? the second year?
$150,000 is deposited in a fund that pays 5% annual compound interest for 2 years, 3% annual compound interest for 2 years, and 4% annual compound interest for 2 years. If uniform annual withdrawals occur over the 6-year period, what will be the magnitude of the annual withdrawals? a. $27,689.63b. $28,614.29 c. $28,804.50 d. $29,552.62
Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund should be expected to net $1,900,000 in 35 years. Assume the first deposit is made at the end of this month. What effective annual rate (EAR) is Bank ZLX expecting their new fund to return?
Bright Inc. will be receiving $5,500 at the end of every month for the next 2 years. If these payments were directly invested into a fund earning 6.00% compounded semi-annually, what would be the future value of the fund at the end of 2 years? Round to the nearest cent