SURVEY OF ACCOUNTING-ACCESS
4th Edition
ISBN: 9780077631536
Author: Thomas Edmonds
Publisher: McGraw-Hill Education
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Question
Chapter 16, Problem 6Q
To determine
Ascertain the amount that would be needed to invest today, if future amount after one year is $100,000, and state whether future amount of $100,000 is more than the today’s cash or not.
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6. You decide you want to start investing for your retirement and you want to have $650,000. If you save $100 a month in an account that averages a 10% annual rate of return, will you have enough money in 25 years? (Hint: this formula was introduced in Section 1)
You are going to invest $6829 in 1 years and $7200 in 4 years. If you expect to earn a return of 9.51%, how much will you have in 11 years?
Answer:
You are considering an investment that is expected to pay 5 percent in year 1, 7 percent in years 2 and 3 and 9 percent in year 4. If you invest $2,000 today, what will this investment be worth at the end of the fourth year?
A. $2,620.68B. $2,693.71C. $2,713.04D. $2,501.42
Chapter 16 Solutions
SURVEY OF ACCOUNTING-ACCESS
Ch. 16 - Prob. 1QCh. 16 - Prob. 2QCh. 16 - Prob. 3QCh. 16 - 4. Define the term return on investment. How is...Ch. 16 - Prob. 5QCh. 16 - Prob. 6QCh. 16 - Prob. 7QCh. 16 - Prob. 8QCh. 16 - Prob. 9QCh. 16 - Prob. 10Q
Ch. 16 - 11. Maria Espinosa borrowed 15,000 from the bank...Ch. 16 - Prob. 12QCh. 16 - 13. What criteria determine whether a project is...Ch. 16 - Prob. 14QCh. 16 - Prob. 15QCh. 16 - Prob. 16QCh. 16 - 17. What is the relationship between desired rate...Ch. 16 - Prob. 18QCh. 16 - Prob. 19QCh. 16 - Prob. 20QCh. 16 - Prob. 21QCh. 16 - Prob. 22QCh. 16 - Prob. 23QCh. 16 - Exercise 10-1A Identifying cash inflows and...Ch. 16 - Prob. 2ECh. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Prob. 5ECh. 16 - Prob. 6ECh. 16 - Prob. 7ECh. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 10ECh. 16 - Prob. 11ECh. 16 - Prob. 12ECh. 16 - Prob. 13ECh. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Prob. 16PCh. 16 - Prob. 17PCh. 16 - Prob. 18PCh. 16 - Prob. 19PCh. 16 - Prob. 20PCh. 16 - Prob. 21PCh. 16 - Prob. 22PCh. 16 - Prob. 23PCh. 16 - Prob. 1ATCCh. 16 - ATC 10-4 Writing Assignment Limitations of capital...Ch. 16 - Prob. 5ATC
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Similar questions
- If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%arrow_forwardIf you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%arrow_forwardHow much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%arrow_forward
- How much would you invest today in order to receive $30,000 in each of the following (for further instructions on present value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%arrow_forwardHow 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%?arrow_forward2 a) Suppose you receive $10,000 and have an opportunity to earn a real rate of return of 10% (assume known and constant forever). Using the definition of income proposed by John Hicks, what is your annual sustainable income? In other words, what amount can you spend every year forever? b) What is the present value of an annual payment of $10,000 forever, assuming a 5% real discount rate? $9,523.80 $200,000 Infinite $10,000arrow_forward
- 1. You want to have an income of $50,000 per year in retirement, and you think you will be alive for 30 years in retirement. How much do you need to have invested the day you retire, in real dollars, assuming a 3% real rate of return?arrow_forwarda) What single investment made today, earning 12% annual interest, will be worth $6,000 at the end of 6 years?b) What is the present value of $6,000 to be received at the end of 6 years if the discount rate is 12%?c) What is the most you would pay today for a promise to repay you $6,000 at the end of 6 years if your opportunity cost is 12%?d) Compare, contrast, and discuss your findings in parts a through c.arrow_forwardYou plan to invest $5,000 into an account. If you would like to have $10,000 in 15 years, what rate of return must you earn? Question 5 options: 6.02% 5.24% 4.73% 7.55% 7.11%arrow_forward
- Suppose you are offered an investment opportunity that will pay $2,500 in five years if you invest $2,000 today. What is the implied rate of return? A) 4.56% B) 4.00% C) 5.00% D) 3.62% E)25.00%arrow_forward(Use Calculator or Formula Approach) Suppose you need $15,000 in 3 years . If you can earn 6% annually, how much do you need to invest today? If you could invest the money at 8%, would you have to invest more or less than at 6%? How much?0arrow_forward3. You would like to have $42000 in five years to make some improvements on your house. What is the amount you need to invest today at 6% compounded monthly to reach your goal? How much of the $42000 is interest? SOLVE ON EXCELarrow_forward
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