1. [3] A principal of $20,500 generates income of $3,000 at the end of every 2 years at an effectiverate of interest of 3% per annum for as long as possible. Calculate the term of the annuity anddiscuss the three possibilities of settling the last payment:(a) at the time of the last regular paymentOutstanding AMT paid @ t=9 $297.26(b) two years after the last regular paymentOutstanding AMT paid @ t= 10 $315.37(c) at the fractional time equal to the term of the annuityOutstanding AMT paid @ t= 9.10Using compound interest (2.46)$299.072. [4] An endowment of $5,000 is to generate a $1,000 scholarship every academic year forever.Assuming the interest rate is 6% per annum, when can the first scholarship be offered?Scholarship can be offered in 20 years and 8 months.3. [3] Calculate(a) (la) 710.05(b) (Is)710.05ANS: $22.02, $30.98

c) At the fractional time equal to the term of the annuity:In this case, we consider the annuity…

Answered: 1. [3] A principal of $20,500 generates…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 7MC: Using the information provided, what transaction represents the best application of the present...

See similar textbooks

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.
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Value of an Annuity Using the appropriate tables, solve each of the following. Required: 1. Beginning December 31, 2020, 5 equal withdrawals are to be made. Determine the equal annual withdrawals if 30,000 is invested at 10% interest compounded annually on December 31, 2019. 2. Ten payments of 3,000 are due at annual intervals beginning June 30, 2020. What amount will be accepted in cancellation of this series of payments on June 30, 2019, assuming a discount rate of 14% compounded annually? 3. Ten payments of 2,000 are due at annual intervals beginning December 31, 2019. What amount will be accepted in cancellation of this series of payments on January 1, 2019, assuming a discount rate of 12% compounded annually?
Find the future value of the annuity due. 3) Payments of $2500 made at the beginning of each semiannual period for 15 years at 4% compounded semiannually Please show all workings step by step.
A deferred perpetuity-due begins payments at time n with annual payments of $1,000 per year. If the present value of this perpetuity-due is equal to $6,561 and the effective rate of interest i=1/9, find n. To be computed by hand, not in excel.
Find the present value of the following annuity: An amount of $15,806 is paid quarterly for 3 years at a compound quarter interest of 6.8%. (a) $170,260.47 (b) $170,270.74 (c) $170,200.47 (d) $170,275.47 Answer A Submit
A principal of $20,500 generates an income of $3,000 at the end of every 2 years at an effective rate of interest of 3% per annum for as long as possible. Calculate the term of the annuity and discuss the possibilities of settling the last payment.
Estimate the interest earned by an annuity for each time period. i) 2 years: _____ ii) 14 years: _____ iii) 22 years: _____
2. Find the accumulated amount of the ordinary annuity paying an amortization of P1,000 per month at a rate of 12% compounded monthly for 5 years.
Calculate the present value of the following annuities, assuming each annuity payment is made at the end of each compounding period. Annuity Payment Annual Rate Interest Compounded Period Invested 1. $4,000 7% Annually 5 years 2. 9,000 8 Semiannually 3 years 3. 3,000 8 Quarterly 2 years
Find the payment that should be used for the annuity due whose future value is given. Assume that the compounding period is the same as the payment period. 7) $8000; quarterly payments for 8 years; interest rate 4.1%.
What annual deposit is necessary to have $15,000 in 7 years if all the money is deposited at 1.5% interest compounded annually? (a) State the type. amortization sinking fund ordinary annuity present value of an annuity present value (b) Answer the question. (Round your answer to the nearest cent.) $

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

Principles of Accounting Volume 1

Accounting

ISBN:

9781947172685

Author:

OpenStax

Publisher:

OpenStax College

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Corporate Fin Focused Approach

Finance

ISBN:

9781285660516

Author:

EHRHARDT

Publisher:

Cengage

SEE MORE TEXTBOOKS