4-15. Mr. Smith has saved $1,800 each year for 20 years. A year after the saving period ended, Mr. Smith withdrew $7,500 each year for a period of 5 years. In the sixth and seventh years, he only withdrew $5,000 per year. In the eighth year, he decided to withdraw the remaining money in his account. If the interest rate was 6% per year throughout the whole period, what was the amount he withdrew at the end of the eighth

4-15. Mr. Smith has saved $1,800 each year for 20 years. A year after the saving period ended, Mr. Smith withdrew $7,500 each year for a period of 5 years. In the sixth and seventh years, he only withdrew $5,000 per year. In the eighth year, he decided to withdraw the remaining money in his account. If the interest rate was 6% per year throughout the whole period, what was the amount he withdrew at the end of the eighth

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Eugene began to save for his retirement at age 35, and for 15 years he put $ 325 per month into an ordinary annuity at an annual interest rate of 8% compounded monthly. After the 15 years, Eugene was unable to make the monthly contribution of $ 325, so he moved the money from the annuity into another account that earned 8% interest compounded monthly. He left the money in this account for 15 years until he was ready to retire. How much money did he have for retirement? If Eugene had waited until he was 44 years old to start saving for retirement and then decided to put money into an ordinary annuity for 21 years earning 8% interest compounded monthly, what monthly payment would he have to make to accumulate the same amount for retirement as you found in the first part of the question?
Sam refuses to retire until his retirement account has a balance of at least $ 369,214 . Sam refuses to make any more deposits in the account. The account currently has a balance of$ 117,923 and earns 6% per year, compounded semi-annually. How long does Sam have before he will retire? You are computing number of years. Round your answer to one decimal place. For example, record 14.294 years as 14.3.
Victor has been consistently withdrawing money from his savings account for several years. If he withdrew $19500.0 every year for 7 years, and interest rate was 0.075 compounded annually, what was his original investment at time zero to enable these payments. At the end of 7 years his account balance was zero. Your Answer:
Asa has invested money from the settlement of an insurance claim. She plans to withdraw $ 2,560 from her savings account at the end of each quarter for five years. If the payments are deferred for five years and interest is 8% compounded semi-annually, what was the amount of the insurance settlement?
Joel invested $1,025 at the end of every month into an investment fund that was earning interest at 4.75% compounded monthly. She stopped making regular deposits at the end of 9 years when the interest rate changed to 5.00% compounded quarterly. However, she let the money grow in this investment fund for the next 4 years. a. Calculate the accumulated balance in her investment fund at the end of 9 years. $0.00 Round to the nearest cent b. Calculate the accumulated balance in her investment fund at the end of 13 years. $0.00 Round to the nearest cent c. Calculate the amount of interest earned over the 13-year period. $0.00 Round to the nearest cent
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Five years ago, alex loaned his son Liam $20,000 to start a business. A note was executed with an interest rate of 8%, which is the Federal rate. The note required monthly payments of the interest with the $20,000 due at the end of 10 years. Liam always made the interest payments until last year. During the current year, Liam notified his father that he was bankrupt and would not be able to repay the $20,000 or the accrued interest of $1,800. Tom is an accrual basis taxpayer whose only income is salary and interest income. The proper treatment for the nonpayment of the note is: a.$3,000 deduction. b.$20,000 deduction. c.No deduction. d.$21,800 deduction.
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