Answered: If you wish to have $60,000 in 8 years,…

If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 1MC

See similar textbooks

Related questions

Q: Q2. You are considering investing $2,000 in a bank term deposit for 5 years. The term deposit will…

A: We will use the concept of time value of money (TVM) to solve the question. According to TVM, money…

Q: Assume you deposit $1,000 today in an account that pays 8 percent interest (compounded annually).…

A: Given: Present value = $1,000 Years = 4 Interest rate = 8%

Q: 1. At what rate must RM50,000 to grow to 406,855 in 15 years compounded annually? Select one: a.…

A: "Since you have posted multiple questions, we have solved the first question for you. To get it…

Q: 7 - When you estimate that you can buy a house for 1,000,000 TL in 10 years, if you accept that the…

A: Annuity means where regular payment is made at the end of regular period and full amount with…

Q: Imagine that you have $8,000 to invest for 19 years. How much more interest will you earn if you…

A: Interest is the cost of borrowing or lending money.

Q: You will deposit $30,000 per year into an account beginning today that pays 13 percent per year.…

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

Q: D. A man deposits P50, 000 in a bank account at 6% compounded monthly for 5 years. If the inflation…

A: Future value- Future value is the estimated value of an asset in the future, taking into account a…

Q: 1: A bank account pays 5.5% annual interest, compounded monthly. How long will it take the money to…

A: The value of current payment or upcoming flow of payments at any future date when flow of payment…

Q: What interest rate must your bank offer if you want your $2,730 invested today to grow to $3,470 in…

A: Present Value: The present value is the present sum of a series of fixed payments. The series of…

Q: Assume you make a deposit of $7,500 now into a saving account that pays 12% per year, compounded…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: An investor put his money in an investment earning 10 1/2% simple interest rate per annum. If his…

A: simple interest formula: A=P×1+RT given, p 12.30 MILLION R=10.5% T=15 / 12 YEARS

Q: An investment company pays 9% compounded semiannually. You want to have $16,000 in the future. (A)…

A: Compound interest is the addition of interest to in other words, the principal amount of a loan or…

Q: Q1 (a) OCBC Bank is offering an interest rate of 7% per annum for fixed deposit account holder. The…

A: Many Thanks for the Question “Since you have asked multiple question, we will solve the first…

Q: Suppose that the interest rate on Treasury bills is 6%, and every sale of bills costs P60. You pay…

A: Economic Order Quantity: The economic order quantity is the ordering level at which the storage…

Q: If you deposit OMR 5000 in your account in a bank; if your bank pays 9.05% interest, how much will…

A: future value = present value *(1+rate)^n future value = 5000 * 1.090515

Q: Assume that you currently have $52,385 in the bank. That you are going to receive $585 four times a…

A: Present Value is the current value of the future sum of money at the specific rate of return.

Q: If you earn 8% per year on your bank account, how long will it take an account with $100 to double…

A: We use the formula:A=P(1+r/100)^nwhereA=future valueP=present valuer=rate of interestn=time period.

Q: Assume that you currently have $53,296 in the bank. That you are going to receive $619 yearly until…

A: Present Value is the current value of the future sum of money at the specific rate of return.

Q: What will a deposit of $2500 at 7.8% compounded semiannually be worth if left in the bank for six…

A: Formula for Future Value FV=PVx(1+r/2)nxt Where, FV = Future Value PV = Present Value r = rate of…

Q: a) If you deposit $10 000 today in a bank statement paying 10.38%, how much will you…

A: Since you have posted multiple questions, we will answer the first one for you. If you want a…

Q: If an investor intends to double $25,000 by investing in a bank that pays 7% interest per year,…

A: The time required to double the investment can be calculated by using the formula of future value .…

Q: A bank loan of P6,000,000 at 10% pa, is to be paid in 10 equal payments, the first of which to be…

A: Loan = 6,000,000 Interest rate = 10% p.a. Number of annual payments = 10 First loan payment starts…

Q: Assuming an interest rate of 10%, how much (rounded to nearest dollar) will need to be deposited in…

A: Annual deposit = Accumulated saving at the end of 8th year / Future value factor at 10%, 8 years

Q: What will a deposit of $5500 at 7.8% compounded monthly be worth if left in the bank for 5 years?…

A: In the TVM calculator the input parameters will be: N = 60 (5 years * 12 months in a year = 60) I%…

Q: 1. If an investment over nine years at a rate of P288.00 results in a final balance of P1,088.00,…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: How much money must be put into a bank account yielding 3.5% (compounded annually) in order to have…

A: Money that must be put into a bank account yielding 3.5% (compounded annually) in order to have…

Q: True or false: The formula An = 1000 + 30n can be used to calculate the final amount in an…

A: Interest revenue is the amount received over and above the principal amount on investing or…

Q: What will a deposit of $4500 at 7.8% compounded semiannually be worth if left in the bank for six…

A: N = 6 years * 2 semi-annual period in a year = 12 I% = 7.8 PV = - 4500 Pmt = 0 P/Y = 2 (as…

Q: If in your Allied Bank account you deposit Rs.15,000 at the end of each year at 14% interest rate…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: Q9. If an amount of $14,000 is deposited into a savings account at an annual interest rate of 5%,…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Q1. If you decide to deposit $5000 in each year for 10 years and bank offer 10% annual compound…

A: Present value is the current value of the amounts that can be made in future. If same cash flows…

Q: If you borrowed P 10,000.00 from a bank with 8% interest per annum, what is the total amount to be…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: Q1:If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in…

A: Answer 1. The formula used for computation of future value: Future Value=Deposit Amount…

Q: You are currently investing your money in a bank account which has a nominal annual rate of 7…

A: To estimate how long it will take to double an investment at a given interest rate, we can use the…

Q: You deposit $2,000 one year and $1000 next year starting year 1 until year 30 with an interest rate…

A: The correct option is e. 18050

Q: u deposit $1.000 one year. $2000 next year and withdraw $1000 other year starting year I until year…

A: This problem can be simplified by converting into three years period.

Q: If you deposit $45,000 into an account earning 4% interest compounded quarterly per year: 1- How…

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

Q: If in your Allied Bank acqount you deposit Rs.15,000 at the end of each year at 14% interest rate…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: f you deposit RM3,305 in an account earning 12%, how much would you have in the account after 15…

A: Using the future value function in excel

Q: Using the Future Value of 1 Table, what factor would you use to calculate the future value of your…

A: Future Worth: It is the future value of the current sum of money compounded at a particular interest…

Q: 2. 4. Briefly explain the following Time value of money L IL n 0 1 Doarp Difference between simple…

A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a…

Q: n investment company pays 4% compounded semiannually. You want to have $11,000 in the future (A) How…

A: Present Value can be calculated using PV function in excel PV (rate, nper, pmt, [Fv], [type])…

Concept explainers

Types of Money Market Instruments

Question

PV = FV * 1 / (1+i)^n FV = PV * (1+i)^n

If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate of 9%?

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, finance and related others by exploring similar questions and additional content below.

Similar questions

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.
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.
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?
What will a deposit of $5500 at 7.8% compounded monthly be worth if left in the bank for 5 years? Use the TMV calculator to fill in the table. N 60 I% 7.8 PV PMT 0 FV P/Y C/Y
A bank lends some money to a business. The business will pay the bank a single payment of $180,000 in ten years time. How much greater is the present value (PV) of this payment if the interest rate is 8% rather than 7%? A. $9,754 B. $6,502 C. $11,379 D. $8,128 Please use financial calculater variable entries.
If a 6 month term deposit at a bank pays a simple interest of 3%, how much will have to be deposited to earn $18 000? Question 9 options: A) $270 B) $1 200 000 C) $600 000 D) $120 000 E) $540
What will a deposit of $4500 at 7.8% compounded semiannually be worth if left in the bank for six years? Use the TMV calculator to fill in the table. N I% 7.8 PV -$4500 PMT 0 FV P/Y C/Y 2
a) If you deposit $10 000 today in a bank statement paying 10.38%, how much will you have in one (1) year. b) If you need 12 000 in one (1) year, how much do you need to deposit today 2. What is the present value of $14 784 invested at an interest rate of 4% for twenty three years. 3. How much do we deposit at 8% at the end of each year to accumulate $5 000 at the end end of 10 years
You are currently investing your money in a bank account which has a nominal annual rate of 7 percent, compounded monthly. How many years will it take for you to double your money? m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FV Identify variables and use excel
A bank lends some money to a business. The business will pay the bank a single payment of $184,000 in ten years time. How much greater is the present value (PV) of this payment if the interest rate is 9% rather than 8%? A. $10,506 B. $9,005 C. $6,003 D. $7,504
You wish to accumulate $60,000. You make 14 quarterly deposits into a savings account with an interest rate of 12% per quarter. What is the amount of each deposit? Group of answer choices $3,511.58 $1,264.40 $1,852.27 $9,052.27
1. High Land Property Development Corp has a P10,000 note receivable from a customer due in three years. How much is the note worth today if the interest rate is 12% compounded monthly? PV = FV [PVFk,n] To get the PVFk,n (present value factor) = 1(1+r)t 2. Your sister borrowed P5,000 from you and promised to repay P5,550 in one year. What interest rates are implied by the lending arrangements? FV = PV [FVFk,n] or FV = PV x (1 + r)t 3. Z is purchasing an automatic washing machine in an installment basis. She is given 3 monthly installments of P6,000 per month with an interest rate of 10%. What is the price that Mrs Z is paying for the washing machine? PVA = PMT[PVFAk,n] or PMT [1 / r − 1 / r(1+r)t]