Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
1st Edition
ISBN: 9780134047430
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 7, Problem 7.16E
To determine
The amount that must be contributed each year in order to successfully retire the debt in 15 years.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Jim wants to deposit an amount anually to meet his retirement needs.
Assume that he will deposit a fixed annual amount for the next 20 years into a retirement savings account, starting one year from now. Mark has a son who will be attending college and plans to make 5 withdrawals (starting one year after making his final deposit into the retirement account) of $35,000 each to pay for his annual tuition for the following 5 years. Commercial Banks will be paying 6 percent on such retirement accounts for the next 25 years.
How much should Mark place in the account annually to cover his retirement needs.
K
Tyler Swift borrowed $1,100,000 to build a recording studio in his home. The total amount of the debt along with 6% annual interest must be repaid in 18 years.
He decides to invest in a debt sinking fund that will be used to retire the debt. The fund eams 9% interest and requires him to pay an equal amount each year
(end of each year) starting in Year 5 and lasting through maturity. Interest is compounded annually.
(Click the icon to view the Future Value of $1 table.)
(Click the icon to view the Present Value of $1 table.)
(Click the icon to view the Future Value of an Ordinary Annuity table.)
(Click the icon to view the Present Value of an Ordinary Annuity table.)
(Click the icon to view the Present Value of an Annuity Due table.)
(Click the icon to view the Future Value of an Annuity Due table.)
Requirement
What amount must Tylor Swift contribute each year in order to successfully retire the debt in 18 years? (Use the present value and future value tables, the
formula method, a…
Jin decided to sell their farm and to deposit the fund in a bank. After computing
the interest, they learned that they may withdraw P480,000.00 arly for 8 years
starting at the end of 6 years when it is time for him to retire. How much is the
fund deposited if the interest rate is 5% converted annually?
Chapter 7 Solutions
Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - If interest is compounded more than once a year,...Ch. 7 - Prob. 7.4QCh. 7 - Can an ordinary annuity table be used to determine...Ch. 7 - Prob. 7.6QCh. 7 - Is the present value of an ordinary annuity more...Ch. 7 - Prob. 7.8QCh. 7 - Simple Interest. Assume Shafer Corporation...Ch. 7 - Compound Interest. Assume Shafer Corporation...
Ch. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Prob. 7.5BECh. 7 - Present Value of a Single Sum, Compound Interest....Ch. 7 - Future Value of a Single Sum, Compound Interest....Ch. 7 - Prob. 7.8BECh. 7 - Present Value of a Single Sum, Compounded Interest...Ch. 7 - Prob. 7.10BECh. 7 - Present Value of a Single Sum, Calculating Time...Ch. 7 - Future Value of an Ordinary Annuity. An...Ch. 7 - Future Value of an Annuity Due. Mariah Carey...Ch. 7 - Future Value of an Ordinary Annuity: Calculating...Ch. 7 - Present Value of an Ordinary Annuity. CB...Ch. 7 - Present Value of an Annuity Due, Semiannual...Ch. 7 - Prob. 7.17BECh. 7 - Ordinary Annuity, Annuity Due, Using Interest...Ch. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Future Value of an Ordinary Annuity, Future Value...Ch. 7 - Single Sum, Solving for Other Variables. Two...Ch. 7 - Ordinary Annuity, Solve for Interest Rate,...Ch. 7 - Present Value, Note Payable Prices. Wiz Khalifa...Ch. 7 - Future Value of a Deterred Annuity. Lenny Shafer...Ch. 7 - Prob. 7.13ECh. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Future Value of an Annuity Due, Decision Making....Ch. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.1PCh. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Present Value, Present Value of an Annuity Due,...Ch. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Present Value of an Annuity Due, Deferred...Ch. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Future Value of an Ordinary Annuity, Deferred...Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Prob. 7.12PCh. 7 - Prob. 7.13PCh. 7 - Expected Cash Flows. Hiteck Electronics sells a...Ch. 7 - Prob. 7.15P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Justin is saving for his retirement 21 years from now by setting up a savings plan. He has set up a savings plan wherein he will deposit $104.00 at the end of every six months for the next 11 years. Interest is 7% compounded semi-annually. (a) How much money will be in his account on the date of his retirement? (b) How much will Justin contribute? (c) How much will be interest?arrow_forwardMary takes out a 20-year loan of $10,000. She repays her loan using the sinking fund method. She pays interest annually, also at an annual effective interest rate of 6%. In addition, Mary makes level annual deposits at the end of each year for 20 years into a sinking fund. The annual effective rate on the sinking fund is 4%, and she pays the value of loan after 20 years. Find the interest and the principle repaid in the eleventh year by Maryarrow_forwardTo prepare for his retirement in 13 years, Tekla deposited 10,000 in an account paying 9%. Nine years after, he deposited another 10,000. How much will be available at his retirement?* Find the simple interest earned in an account where 5,000 is on deposit from March 14, 2020 to your birthday next year at 5%. Write your birthday. Use all methods discussed.* For what rate it is possible for a deposit of 40,000 to earn 8,400 in simple interest if the money is to be left on deposit for 5½ years?* Find the principal necessary to earn 500 in simple interest if the money is to be left on deposit for 5 years and earns (A) 8.5%; (B) 8%; (c) 7.5%.* Michelle signs a note for 2,000 due in 9 months at 3%. Three months after the note is signed, the holder of the note sells it to Donita who charges 3.5%. How much does the holder receive?* Tekla owes 100 due in 5 months and 700 due in 9 months. What single payment in 6 months will discharge these obligations if the settlement is based on an interest…arrow_forward
- Cameron is saving for his retirement 22 years from now by setting up a savings plan. He has set up a savings plan wherein he will deposit $97.00 at the end of every three months for the next 12 years. Interest is 10% compounded quarterly. (a) How much money will be in his account on the date of his retirement? (b) How much will Cameron contribute? (c) How much will be interest? (a) The future value will be $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forwardTroy is saving for his retirement 24 years from now by setting up a savings plan. He has set up a savings plan wherein he will deposit $115.00 at the end of every three months for the next 11 years. Interest is 9% compounded quarterly. (a) How much money will be in his account on the date of his retirement? (b) How much will Troy contribute? (c) How much will be interest? (a) The future value will be $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forwardMike joins a savings program where he deposits $1000 at the beginning of each year for 25 years, In return, he will earn a perpetuity paying $6300 per year with the first payment at the end of the 30th year. The effective interest rate is 5% for the first 20 years and 8% afterward • a) Will Mike have accumulated enough to fund the perpetuity? • b) If your answer above is no, find the unique extra deposit X that Mike has to make at the end of the 28th year in order to fund the perpetuity + Drag and drop an image or PDF file or click to browse.arrow_forward
- Betty Yowski borrows money for a new swimming pool and hot tub. She agrees to repay the note with a payment of $1200 per quarter for 6 years. Find the amount she must set aside today to satisfy this capital requirement in an account earning 8% compounded quarterly.arrow_forwardNine years from now, Sam wants to have an amount available to deposit into an account that earns 6 percent compounded annually. This account is to provide Sam with an income of $10,000 at the end of each year for 10 years. To accomplish this, Sam invests in an 8-year bank certificate that pays 8 percent compounded semiannually, and he will use this certificate, plus interest , to establish his income account. What should be the principle value of the certificate be ? please solve these math details and do not be use any softwarearrow_forwardPhil Nelson’s uncle has decided to retire to Arizona in 12 years. What amount should he invest today so that he will be able to withdraw $32,000 at the end of each year for 17 years after he retires? Assume he can invest the money at 7% interest compounded annually.arrow_forward
- Mr. A made a 20-year retirement plan and according to his plan, he aimed to withdraw 6000 TL at the end of the first year and planned to increase the amount withdrawn by 800 TL at the end of the following year. Since he has agreed with a bank that pays 9% compounded annual interest to implement this plan, how much money should Mr. A have to deposit in the bank at the start of the plan?arrow_forward4. Rodel decided to sell their farm and to deposit the fund in a bank. After computing the interest, they learned that they may withdraw P480,000.00 arly for 8 years starting at the end of 6 years when it is time for him to retire. How much is the fund deposited if the interest rate is 5% converted annually?arrow_forwardAt the end of year 5 Joe starts to withdraw $14500 from his savings account. If he takes out the same amount each year and the interest rate is 14%, what was Joe's initial investment assuming the account will be depleted at the end of year 25arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning