Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter M, Problem 2MC
To determine
Determine the amount of cash that would be available in the savings account 2 years from today.
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The following situations involve the application of the time value of the money concept. Use the full factor when calculating your results.
Use the appropriate present or future value table:
FV of $1, PV of $1, FV of Annuity of $1, and PV of Annuity of $1
1. Janelle Carter deposited $9,690 in the bank on January 1, 2000, at an interest rate of 10% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.$fill in the blank 1
2. Mike Smith deposited $20,830 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $64,695. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent.fill in the blank 2 %
3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 11% compounded annually. On January 1, 2017, the deposit has accumulated to $13,570. How much money did Lee originally deposit on…
You deposit $100, $150, & $200 in a bank account at the end of years 1,2,& 3 and earn 7%interest. If (P/G, 7%, 3)=2.506 and (A/P, 7%, 3)=.3811 what is the present value (now) ofthese deposits.
Suppose you deposit $100 in a bank, which of the following will occur
A The bank's assets will increase by $100
B The bank's liabilities will increase by $200
C The bank's liabilities will decrease by $100
D The bank's reserves will increase by $200
Chapter M Solutions
Intermediate Accounting: Reporting And Analysis
Ch. M - Explain interest.Ch. M - Prob. 2GICh. M - Prob. 3GICh. M - Prob. 4GICh. M - Prob. 5GICh. M - Prob. 6GICh. M - Prob. 7GICh. M - Prob. 8GICh. M - Prob. 9GICh. M - Prob. 10GI
Ch. M - Prob. 11GICh. M - Prob. 12GICh. M - Prob. 13GICh. M - Prob. 14GICh. M - Prob. 15GICh. M - Prob. 16GICh. M - Prob. 17GICh. M - Prob. 18GICh. M - Prob. 19GICh. M - Prob. 20GICh. M - Prob. 21GICh. M - Prob. 22GICh. M - What is a deferred ordinary annuity? How does it...Ch. M - Prob. 24GICh. M - Prob. 25GICh. M - Give two examples of assets and three examples of...Ch. M - Prob. 1MCCh. M - Prob. 2MCCh. M - Refer to the present value table information on...Ch. M - Refer to the present value table information on...Ch. M - On May 1, 2019, a company purchased a new machine...Ch. M - An office equipment representative has a machine...Ch. M - Prob. 7MCCh. M - For which of the following transactions would the...Ch. M - On July 1, 2019, James Rago signed an agreement to...Ch. M - On January 1, 2019, Ken Company sold a machine to...Ch. M - Prob. 1RECh. M - Based on the following annual interest rates, what...Ch. M - Prob. 3RECh. M - Prob. 4RECh. M - Next Level Potter wishes to deposit a sum that at...Ch. M - Prob. 6RECh. M - Prob. 7RECh. M - Prob. 8RECh. M - Prob. 9RECh. M - If 90,000 is invested in a fund on December 31,...Ch. M - Samuel Ames owes 20,000 to a friend. He wants to...Ch. M - Prob. 12RECh. M - Prob. 13RECh. M - Prob. 14RECh. M - Prob. 1ECh. M - Future Value Hugh Colson deposited 20,000 in a...Ch. M - Prob. 3ECh. M - Future Value of Annuity Using appropriate tables,...Ch. M - Prob. 5ECh. M - Prob. 6ECh. M - Prob. 7ECh. M - Cash Flow Amounts R. Lee Rouse borrows 10,000 that...Ch. M - Prob. 9ECh. M - Amount of an Annuity John Goodheart wishes to...Ch. M - Prob. 11ECh. M - Prob. 12ECh. M - Present Value of Leased Asset On January 1, 2019,...Ch. M - Amount of an Annuity Beginning December 31, 2023,...Ch. M - Prob. 1PCh. M - Prob. 2PCh. M - Prob. 3PCh. M - Determining Loan Repayments Jerry Rockness needs...Ch. M - Prob. 5PCh. M - Prob. 6PCh. M - Value of an Annuity Using the appropriate tables,...Ch. M - Serial Installments; Amounts Applicable to...Ch. M - Prob. 9PCh. M - Comprehensive Part a. Reproduced in the following...Ch. M - Prob. 11PCh. M - Present Value of an Annuity John Joshua wants to...Ch. M - Present Value of an Annuity Ralph Benke wants to...Ch. M - Compound Interest Issues You are given the...Ch. M - Cash Flow Amounts On January 1, 2019, Philip...Ch. M - Prob. 16PCh. M - Comprehensive The following are three independent...Ch. M - Prob. 18PCh. M - Asset Purchase Price BWP Inc. is considering the...Ch. M - Prob. 1CCh. M - Prob. 2CCh. M - Prob. 3CCh. M - Prob. 4CCh. M - Prob. 5C
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- Refer to the present value table information on the previous page. If Kathleen put 3,000 in a savings account today, what amount of cash will be available 2 years from today? a. 3,000 0.857 b. 3,000 0.857 2 3,000 c. 4,000 0.681 0926 d. cannot be determined from the information givenarrow_forwardRefer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264arrow_forwardYou put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.arrow_forward
- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.arrow_forwardHow much would you invest today in order to receive $30,000 in each of the following (for further instructions on present value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%arrow_forwardWith an initial deposit of 200 dollars, the balance in a bank account after t years is f(t) = 200(1.05)t dollars. What are the units of the rate of change of f(t)? Find the average rate of change over [0,1]arrow_forward
- What is the present value of a savings account that is expected to pay $1,250 of cash inflow at the end of year 1, $0 cash inflow at the end of year 2 and $1,050 cash inflow at the end of 3rd year given the rate of return 10% in the first and second year and 12% in the third year? Please Show the workarrow_forwardwhich one is correct please confirm? QUESTION 8 Determine how much $1,000 deposited in a savings account paying 8% (compounded annually) will be worth after 5 years. a. $1,469 b. $1,400 c. $5,526 d. $784arrow_forwardFind the equivalent present worth of the cash receipts in the accompanyingdiagram, where i = 8% compounded annually. In other words, how much doyou have to deposit now (with the second deposit in the amount of $600 at the end of the first year) so that you will be able to withdraw $300 at the end of the second year through the fourth year, and $800 at the end of the fifth year, where the bank pays you 8% annual interest on your balance?arrow_forward
- 2. 5 years ago, Aswad invested RM5660 in a bank at a rate of 12% compounded monthly. Using S=P(1+i)^n. No use excel. Find: a) the amount in the account today (RM10282.50) b) the number of years required if Aswad wanted the amount in the account to become RM22344.26. (11.5 years)arrow_forwardA bank gives a loan to a company to purchase equipment which is worth of Tk.1250000 at an interest rate of 11.5% compounded annually. This amount should be repaid in 12 yearly equal installments. Find the installment amount that the company has to pay the bank. Also Draw the cash flow diagramarrow_forwardK Calculate the present value of the following future cash flows, rounding all calculations to the nearest dollar (Click the icon to view Present Value of $1 table) (Click the icon to view Present Value of Ordinary Annuity of $1 table) $12,000 received in five years with interest of 7% $12,000 received in each of the following five years with interest of 7% Payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9% 11. 12. 13. 11. Calculate the present value of $12,000 received in five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value X X Year 3 Year 4 Year 5 Total 12. Calculate the present value of $12,000 received in each of the following five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value of an annuity X 13. Calculate the present value for payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9%…arrow_forward
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