INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
3rd Edition
ISBN: 9780136946533
Author: GORDON
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 7, Problem 7.2E
a.
To determine
The amount to be received after 4 years on given investment if it earns simple interest.
b.
To determine
The amount to be received after 4 years on the given investment if the interest is compounded annually.
c.
To determine
The amount to be received after 4 years on the given investment if the interest is compounded semiannually.
d.
To determine
The amount to be received after 4 years on the given investment if the interest is compounded quarterly.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The parents of a recent senior high school graduate decided to invest the $5,000 she received for her high school graduation in a fund earning 10% annual interest. At the end of the four-year period, she expects to withdraw the money to pay for accumulated university tuition loans. What is the approximate amount that would be available for withdrawal after five years if interest is compounded monthly?
A young couple wants to have a college fund that will pay $20,000 at the end of each half-year for 8 years.
(a) If they can invest at 6%, compounded semiannually, how much do they need to invest at the end of each 6-month period for the next 18 years to begin making their college withdrawals 6 months after their
last investment? (Round your answer to the nearest cent.)
$
(b) Suppose 8 years after beginning the annuity payments, they receive an inheritance of $36,000 that they contribute to the account, and they continue to make their regular payments as found in part (a). How
many college withdrawals will they be able to make before the account balance is $0? (Round your answer to the nearest whole number.)
withdrawals
(b)
A mechanical engineer who is planning for his daughter's college education plans to
start depositing money now (year 0) and continue through year 17. If he deposits RM
5,000 each year,
(i)
Determine how much will his daughter be able to withdraw each year starting
in year 18 and continuing through year 22? Assume the account earns interest
at 10% per year.
Chapter 7 Solutions
INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
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 - Prob. 7.14PCh. 7 - Prob. 7.15P
Knowledge Booster
Similar questions
- Q) At 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 25 Solve on the white paper onlys.arrow_forward1. Your sister is an incoming college freshman taking up a four-year course. Suppose that she wants to purchase a car immediately after graduating from college which will cost P750,000. How much should she invest at the end of every year in an investment fund that earns 9% annually to have enough money to buy the car upon graduation? 2. Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in order to purchase a vehicle. He negotiated for the stated rate of the loan at 6% wherein the current market rate is 10%.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_forward
- Answer each of the following independent questions. Ignore personal income taxes. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Required: 1. Suppose you invest $4,100 in an account bearing interest at the rate of 10 percent per year. What will be the future value of your investment in five years? 2. Your best friend won the state lottery and has offered to give you $11,600 in four years, after he has made his first million dollars. You figure that if you had the money today, you could invest it at 8 percent annual interest. What is the present value of your friend’s future gift? 3. In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $68,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 4 percent per year in order to accumulate the $68,500 purchase price? 4. You have estimated that your educational expenses…arrow_forward2. (a) A college student, Amy, decides to fund a retirement account with $2000 per year for 8 years, with the first deposit made one year from today. The rate of return will be 10%. How much will she have in her account when she retires in 40 years? (b) Amy’s friend, Dacio, decides he will start funding his retirement account 8 years from now (first payment in 9 years). He then will invest $2000 each year for 32 years. If his rate of return is 10%, how much will he have when he retires in 40 years?arrow_forwardParvati wants to donate enough money to Camosun College to fund an ongoing annual bursary of $2,250 to a deserving finance student. How much must she donate today in order for the first payment to start in one year? Assume an interest rate of j=4%. Your Answer: Answerarrow_forward
- 5. A man decided to sell his farm and to deposit the fund in a bank. After computing the interest, they learned that they may be withdraw Php180,000 semi annually for 11 years starting at the end of 7 years when it is time for him to retire. How much is the fund deposited if the interest rate is 5% converted semi annually?arrow_forwardSuppose your parents decide to give you $10,000 to be put in a college trust fund that will be paid in equally quarterly installments over a 5 year period. If you deposit the money into an account paying 1.5% per quarter, how much are the quarterly payments (Assume the account will have a zero balance at the end of period.)arrow_forwardAfter completing your Bachelor of Business (Accounting) degree, suppose you secure a permanent position as an accountant. You drafted a financial plan to retire in 35 years from now andthinking about creating a fund that will allow you to receive $25,000 at the end of each year for 30years after your retirement. The interest rates areexpected to be 2.45% per annum during the 35- year pre-retirement period and 3.15% during retirement. Required: a) To provide the 30-year, $ 25,000-a-year annuity, calculate how much should be in the fund account when you retire in 35 years. b) How much will you need today as a single amount to provide the fund calculated in part (a) if you earn 2.75% per year during the 35-yearpre-retirement period? c) (Using different…arrow_forward
- Parvati wants to donate enough money to Camosun College to fund an ongoing annual bursary of $1,500 to a deserving finance student. How much must she donate today in order for the first payment to start in five years? Assume an interest rate of j1=4%. Your Answer: Answerarrow_forwardA couple with a newborn son wants to save for their child's college expenses in advance. The couple can establish a college fund that pays 8% annual interest. Assuming that the child enters college at age 18, the parents estimate that an amount of $50,000 per year will be required to support the child's college expenses for four years. Determine the equal annual amounts that the couple must save until they send their child to college. (Assume that the first deposit will be made on the child's first birthday and the last deposit on the child's 18th birthday. The first withdraw will be made at the beginning of the freshman year, which also is the child's 18th birthday.) O $4,775.80 O $6,016.13 O $6,138.52 O $4,609.37arrow_forwardMs. Boatright wants to withdraw $2000 from an account at the end of year 1, $4000 at the end of year 2, $5000 at the end of year 3, and $4,000 at the end of year 4. If she earns an interest rate of 8%, how much money will she need to deposit today to fully fund these withdrawals? How much money will be in her account after she makes the second withdrawal?arrow_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