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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Refer to the present value table information on the previous page. What amount should be deposited in a bank today to grow to SI,000 3 years from today:

  1. a. $3000 × 0.857
  2. b. $3,000 × 0.857 × 2
  3. c. $ 3 , 000 0.857
  4. d. $ 3 , 000 0.9236 × 2

To determine

Determine the amount of cash that would be available in the savings account 2 years from today.

Explanation

Future Value: The future value is value of present amount compounded at an interest rate until a particular future date.

In the absence of future value table, given present value table can be used with the help of below formula:

The following formula can be used to calculate the future value amount, using table value:

Present value of an amount = Future value×(pn,i)

Determine the amount of cash that would be available in the savings account 2 years from today.

Present value of an amount = Future value×(pn,i)<

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