A company plans to make four annual deposits of $6,250 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $6,250 annual deposit are made at the end of each of the four years and interest is compounded annually. 2. The $6,250 annual deposit are made at the beginning of each of the four years and interest is compounded annually. 3. The $6,250 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly. 4. The $6,250 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year.
A company plans to make four annual deposits of $6,250 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $6,250 annual deposit are made at the end of each of the four years and interest is compounded annually.
2. The $6,250 annual deposit are made at the beginning of each of the four years and interest is compounded annually.
3. The $6,250 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly.
4. The $6,250 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year.
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