Future Values and Long-Term Investments
Portman Corporation engaged in the following transactions during 2020:
a. On January 1, 2020, Portman deposited $12,000 in a certificate of deposit paying 6% interest compounded semiannually (3% per 6-month period). The certificate will mature on December 31, 2023
b. On January 1, 2020, Portman established an account with Lee County Bank. Portman will make quarterly payments of $2,500 to Lee beginning on March 31, 2020, and ending on December 31, 2021. Lee guarantees an interest rate of 8% compounded quarterly (2% per 3-month period).
Required:
1. Prepare the cash flow diagram for each of these two investments.
2. Calculate the amount to which each of these investments will accumulate at maturity. (Note: Round answers to two decimal places.)
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Cornerstones of Financial Accounting
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