Two accounts each begin with a deposit of $7000. Both accounts have rates of 6.5%, but oneaccount compounds interest once a year while the other account compounds interestcontinuously. Make a table that shows the amount in each account and the interest earned afterone year, five years, ten years, and 20 years.iClick the icon to view some finance formulas.1 year5 years10 years20 yearsCompounded annuallyInterest$$Balance$$$$$$(Round to the nearest dollar as needed.)Compounded continuouslyBalanceInterest$$ In the provided formulas, A is the balance in the account after t years, P is theprincipal investment, r is the annual interest rate in decimal form, n is the numberof compounding periods per year, and Y is the investment's effective annual yieldin decimal form.ntA=P(1 + - m²P==Ant(1 + 1)²A = PertnY = (₁+) ^-₁1

Principal Investment "P" is $7000 Interest rate is 6.5% To Find: Account Balance after 1,5,10 and…

Two accounts each begin with a deposit of $7000. Both accounts have rates of 6.5%, but one account compounds interest once a year while the other account compounds interest continuously. Make a table that shows the amount in each account and the interest earned after one year, five years, ten years, and 20 years. i Click the icon to view some finance formulas. 1 year Compounded annually Interest $ Balance $ Compounded continuously Balance Interest $ $

Two accounts each begin with a deposit of $7000. Both accounts have rates of 6.5%, but one account compounds interest once a year while the other account compounds interest continuously. Make a table that shows the amount in each account and the interest earned after one year, five years, ten years, and 20 years. i Click the icon to view some finance formulas. 1 year Compounded annually Interest $ Balance $ Compounded continuously Balance Interest $ $

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

Similar questions

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
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 $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?
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.)
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?
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?