Part I: Discounting1.You want to set aside 5% of your income from your bi-weekly paycheck and watch it grow. If youwanted to know how much money that would be worth in 5 years, would you use present orfuture value?2. What is the present value of $792 four years from now using a 3% discount rate?3. What is the future value of $500 in 35 years if you receive an 8% rate of return?

Present Value is the value as of today of any future cash flows. Present Value = Future Value / (1 +…

Answered: 1. You want to set aside 5% of your…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Suppose you save $4,000 per year at the end of each year for 30 years and earn 5% interest per year. How much will you have at the end of 30 years? Suppose you save $2,000 per year at the beginning of each year for 15 years and earn 7.49% interest per year. How much will you have at the end of 15 years?NOTE: DONOT SOLVE ON EXCEL
Calculating present and future values Use future or present value techniques to solve the following problems. Starting with $20,000, how much will you have in 12 years if you can earn 12 percent on your money? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you can earn only 6 percent? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you inherited $40,000 today and invested all of it in a security that paid a 9 percent rate of return, how much would you have in 25 years? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If the average…
You are saving for retirement. You hope to have $1,000,000 accumulated in 35 years, making equally- sized annual payments in a "world" with expected returns of 4.5% over that 35 year period. To the nearest dollar, what is the expected size of your annual payments? O $45,000 O $29,857 O $57,270 O $13,577 O $12,270
You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $240,000 per year for the next 30 years (based on family history, you think you'll live to age 70). You plan to save for retirement by making 10 equal annual installments (from age 30 to age 40) into a fairly risky investment fund that you expect will earn 14% per year. You will leave the money in this fund until it is completely depleted when you are 70 years old. EClick the icon to view the present value annuity table.) (Click the icon to view the future value annuity table.) (Click the icon to view the present value table.) E (Click the icon to view the future value table.) To make your plan work answer the following questions: 1 (Click the icon to view the questions.)
Question 6. Your friend turned out to be dishonest and was looking to con you out of $4,902,714. After clearing your mind and refocusing, you decide to calculate how much money you would need to put aside at the beginning of each month for the next 30 years in order to have $4,902,714. You estimate conservatively that your money will earn 2% a year, compounded monthly. What will your monthly contribution to the account need to be?
You just turned 23 years old and want to retire when you turn 65. You expect to withdraw $70,000 per year for 25 years during retirement, starting first withdrawal one year after your 65th birthday. You expect to earn a return of 7% on your investments every year. 1. How much retirement saving do you need to have by 65th birthday to support the withdrawals in the next 25 years? Or the same question can be asked differently, what is the present value (as of your 65th birthday) of the withdrawals you expect to make? 2. How much money should you save each year if you make the first deposit one year from your 23th birthday and the last one on 65th birthday?
5. If you receive $136 each 6 months for 3 years and the discount rate is 0.03, what is the future value? (show the process and can use financial calculator)
Say, you want to buy your dream car, costing $40k, in 5 years. You are saving up for that by making monthly deposits. Your payments increase every month by Sx while your first month deposit is $150. What should x be if you want to purchase your dream car in 5 years? Assume monthly interest of 0.25%, and monthly compounding. Use tables here. Your Answer:
If you buy a bicycle for $1000 and sell it for $1276.3 after 5 years. What is your rate of return? (calculate your interest rate in %)
1.) Starting with $15,000, how much will you have in 10 years if you can earn 6 percent on your money? 2.) If you can earn only 4 percent? If the average new home costs $275,000 today, how much will it cost in 10 years if the price increases by 5 percent each year? 3.) If you can earn 4 percent, how much will you have to save each year if you want to retire in 35 years with $1 million?
Suppose you invest $200 a month for 6 years into an account earning 9% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end? $ Suppose instead you didn't invest anything for the first 6 years, then deposited $200 a month for 20 years into an account earning 9% compounded monthly. How much will you have in the end?
Suppose you want to buy a $143,000 home. You found a bank that offers a 30-year loan at 3.9% APR.A. What will be your monthly payment? (Round to the nearest cent.)B. How much would you end up paying the bank for the home after 30 years? (Round to the nearest cent.)C. Suppose you wanted to reduce the time of your loan to 25 years. What would be your new monthly payment? (Round to the nearest cent.) D.How much would you end up paying the bank for the home after 25 years? (Round to the nearest cent.) E. How much did you save by reducing the time of your mortgage loan? (Round to the nearest cent.)

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS