Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter B, Problem 14E
Summary Introduction
Concept Introduction:
Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.
To calculate: the required interest rate.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Algoe expects to invest $1,000 annually for 40 years to yield an accumulated value of $154,762 on the date of the last investment. For this to occur, what rate of interest must Algoe earn?
Bill Padley expects to invest $10,000 for 25 years, after which he wants to receive $108,347. What rate of interest must Padley earn?
An individual intends to invest $3,000 monthly for two years in a financial asset that pays the investor (nominal) interest of 9% per year. compounded quarterly. What is the value accumulated by this individual at the end of two years?
Chapter B Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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
- Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.arrow_forwardSteffi Derr expects to invest $10,000 annually that will earn 8%. How many annual investments must Derr make to accumulate $303,243 on the date of the last investment?arrow_forwardJohn invests $ 350 on the last day of each month into an account for 4 years compounding monthly at an interest rate of 7.5%, and then allows that investment to earn interest for the next 3 years. What is the value of his investment at the end of the seventh year?arrow_forward
- Morgan invested 2800 for 6 years compounded semi-annually. If the future value of the investment was 4355.27, then what annual interest rate was he earning?arrow_forwardAn engineer has received $10 000 from his employer for a patent disclosure. He has decided to invest the money in a 15-year savings certificate that pays 8% per year, compounded annually. What will be the final value of his investment, in terms of today's dollars, if inflation continues at the rate of 6% per year?arrow_forwardour father paid $10,000 (CF at t = 0) for an investment that promises to pay $850 at the end of each of the next 5 years, then an additional lump sum payment of $12,000 at the end of the 5thyear. What is the expected rate of return on this investment?arrow_forward
- Your retired client has accumulated investment and retirement assets totaling $5,981,000. Assume the client expects to live for another 15 years and that he assumes an annual inflation rate of 3.9 percent. To leave his heirs the future value of the $5,981,000 at the end of the 15 years, and maintain an inflation-adjusted lifestyle of $210,000 a year for all 15 years, the client’s investments would have to earn an average of ______ percent a year for the entire 15 years.arrow_forwardKershaw wishes to accumulate $2 million by the end of 40 years by making equal annual end-of-year deposits over the next 40 years. If he can earn 10 percent on his investments, how much must he deposit at the end of each year? m Nper (or N) =n*m Rate (or I/Y)=i/m PV PMT FVarrow_forwardChuck Brown will receive from his investment cash flows of $3,125, $3,460, and $3,840 at the end of years 1, 2 and 3 respectively. If he can earn 7.5 percent on any investment that he makes, what is the future value of his investment cash flows at the end of three years? (Round to two decimal places.)arrow_forward
- Ashton invested $8450 for five years in his savings account that was earning 3.2% compounded annually. Calculate the future value of his investment at the end of the term and the amount of interest earned during the period.arrow_forwardEdwill just purchased a new home costing R1107900,00 by paying R120000,00 cash on the purchase date, and agreeing to make payments at the end of the following eight years for the remainder owed; the first payment is due one year after the purchase date. The interest rate is 7,4 % per annum,compounded yearly. Considering the amortisation schedule, the percentage rounded to two decimal places, of the total payments made the first two years that will go forward repayment of interest, isarrow_forwardMr. Mañalac invested P 100,000 to a certain business which earns P 10,000 every 2 months for 10 years and at the end of 10 years, he will receive his P 100,000 investment plus the earned interest. Compute for the simple rate on the investment per year.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning