A savings plan requires deposits of $487 per month for 22 months commencing in 1 month from today. If the interest rate is 14.9% p.a compounding monthly, the value of the investment immediately after the last deposit will be (round to nearest cent; don't use $ sign or commas):

A savings plan requires deposits of $487 per month for 22 months commencing in 1 month from today. If the interest rate is 14.9% p.a compounding monthly, the value of the investment immediately after the last deposit will be (round to nearest cent; don't use $ sign or commas):

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: How much would be in your savings account in 7 years after depositing $200 today if the bank pays 10…

A: Step 1: Given Value for Calculation Time = t = 7 YearsPresent Value = pv = $200Interest Rate = r =…

Q: What per period interest rate should you use in the annuity formula to do this calculation? In other…

A: The effective annual interest rate is a crucial concept in finance that is used to describe the true…

Q: Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example…

A: To calculate the future value of annuity account we will use the below formula Future value =…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: To calculate the present value of annuity we will use the below formula Present value =…

Q: Find the present value of the decreasing annuity necessary to fund a withdrawal of $100 per month…

A: Present Value:- It is the formula through which one can evaluate the worth of future income of the…

Q: Assume that you will need 60million shillings in your specialsaving account five years fromnow, to…

A: Future value is the value of current asset at a particular date in the future when it has earned…

Q: Suppose that you want to avoid paying interest and decide you'll only buy the furniture when you…

A: Annuity refers to the contract that is made between the insurer and the insurance company for making…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The present value of the annuity is the discounted worth that is defined as the process of…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The objective of the question is to find the present value (PV) of an annuity account that is…

Q: The Continental Bank advertises capital savings at 7.9% compounded annually while TD Canada Trust…

A: Interest amount refers to the rate that is paid over the principal amount of savings by the bank or…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Given: Payment = $1,400 Years = 20 Interest rate = 4%

Q: Find the future value for the ordinary annuity with the given payment and interest rate. PMT =…

A: PMT = $2000 r = 1.1% per annum = 0.09167% per month n = 6 years = 72 months

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: An annuity is a financial term that depicts a series of cash flows at equal time intervals for a…

Q: accounts. Investmént A is a 12-year annuity that features end-of-month $1,000 payments and has an…

A: Future value of an annuity shows the value of investments we have in the future time period.

Q: Using the formula for an annuity, what would be the monthly payments on a 5-year fixed-rate car loan…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: Assume you make a deposit of $7,500 now into a saving account that pays 12% per year, compounded…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. HINT [See…

A: Present value is the worth of a future sum of money at the present date. The present value of…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: An annuity with a cash value of $11,300 pays $950 at the beginning of every three months. The…

A: Given: Particulars Amount Cash value(PV) $11,300 Payment (PMT) $950 Interest rate 6%

Q: Directions: Read the following annuity problem. Fill in the blanks in the statements th follow. A…

A: The loans are paid by equal monthly payments these monthly payment carry the payment for the…

Q: If you want to earn 7% annual simple interest on an investment, how much should you pay for a note…

A: Simple interest is the type of interest that is calculated on the original amount, It is calculated…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given

A: Present Value of Annuity: It represents the present worth of the future annuity periodic payments…

Q: You have your choice of two investment accounts. Investment A is a 9-year annuity that features…

A: The time value of money technique explains the concept that the rupee received today is worth more…

Q: You are considering an investment account with one of the advertised commercial deposits from…

A: The appropriate interest rate pertaining to a loan or investment is shown by the effective yearly…

Q: Find the periodic withdrawals PMT for the given annuity account. HINT [See Quick Example 4.] (Assume…

A: An annuity is an equal series of periodic payments at a predetermined rate of interest for a…

Q: Find the periodic withdrawals PMT for the given annuity account. HINT [See Quick Example 4.] (Assume…

A: The question gives the following information:

Q: you put $200 per month in an investment plan that pays an APR of 2.5% How many will you have after…

A: An annuity is a type of financial contract intended to give someone a steady stream of income…

Q: If you deposit R50 into an account yielding 2% per month, What is the future value after 60 months…

A: Future value is the compounded value of all future cash flows, compounded at a specified rate of…

Q: You are planning to make monthly deposits of £400 into a retirement account that pays 7 per cent…

A: Solution:-When an equal amount is deposited each period at end of period, it is called ordinary…

Q: Find the amount accumulated FV in the given annuity account. HINT [See Quick Example 1 and Example…

A: Compound = Quarterly = 4Payment = p = $2300Time = t = 10 * 4 = 40Interest Rate = r = 7 / 4 = 1.75%

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: GIVEN, A= $200 n=20 r=2%

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: The present value (PV) of an annuity is a financial concept that represents the current worth or…

Q: You borrow 180000 for 12 years from a bank in order to renovate your flat. The effective interest…

A: Loan Amount = 180,000 Time Period = 12 years Interest Rate = 4.8%

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: Present value of annuity is the value of an asset at time 0. Present value helps in making…

Q: A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1/2 years. If…

A: Semi annual payment = $30,000 Period = 4 1/2 = 4.50 Years Semi annual period = 4.50*2 = 9 Interest…

Q: You have $41,000 in an account earning an interest rate of 4%. What are the equal beginning-of-month…

A: The present value of an annuity due formula uses the same formula as an ordinary annuity, except…

Q: search annuities and calculate an annuity that pays you monthly (like a pension) for a 30 year…

A: Annuities are uniform periodic monthly payments that are paid over the period of time based on the…

Q: You have your choice of two investment accounts. Investment A is a 7-year annuity that features…

A: The time value of money technique explains the concept that the rupee received today is worth more…

Q: Find the present value PV of the annuity account necessary to fund the withdrawal given. (Assume…

A: In the given question an amount of $ 2,100 per quarter will be withdrawn for next 15 years.…

Question

A savings plan requires deposits of $487 per month for 22 months commencing in 1 month from today. If the interest
rate is 14.9% p.a compounding monthly, the value of the investment immediately after the last deposit will be (round
to nearest cent; don't use $ sign or commas):
a. $947.82
b. $12385.50
c. $1089.05
d. $12233.60

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define formula for future value of an annuity

VIEW

Step 2: calculate the future value of the annuity (the value of the investment immediately after the last de

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

An annuity with a cash value of $12,000 pays $1,690 at the beginning of every six months. The investment earns 5% compounded semi-annually. (a) How many payments will be paid? (b) What is the size of the final annuity payment? points possidic (a) The number of payments is (Round up to the nearest whole number.) (b) The size of the final payment is $. (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
If the nominal rate of interest on a loan is 16.3% and interest is compounded monthly, what is the Annual Percentage Rate (APR)? Your answer should be accurate to three decimal places. A9. (a) Given an annual interest rate of 4.3%, what is the maximum amount one will be willing to pay now, as a lump sum, to obtain a pension of £6,720 per year for the next 9 years, if payments are made at end of each year? Your answer should be accurate to two decimal places. (b)
i need the answer quickly
You intend to save for retirement over the upcoming 30 years by allocating R850 monthly to a stock account and R250 monthly to a bond account. The expected return for the stock account is 11%, while the bond account is anticipated to yield 6%. Upon retirement, you plan to merge your funds into an account with a 5% return. All interest rates are Annual Percentage Rates (APRs) compounded monthly. What would be the monthly withdrawal amount from your account over a 25-year period post - retirement?
What is the future value (at the end of 8 years) of an annuity that pays $700 a quarter over 8 years with the payments invested at 9.3% per annum (assume compounding matches payment periods, common assumption for such problems)? (enter your answer in the following format 123456.78) Answer: Check
Find the present value of the decreasing annuity necessary to fund a withdrawal of $100 per month for 20 years, if the annuity earns 3% per year. (Assume end-of-period deposits and compounding at the same intervals as deposits.) Round your answer to the nearest cent.
You expect to have the given amount in an account with the given terms. Find how much you can withdraw periodically in order to make the account last the specified amount of time. Round your answer to the nearest cent. Account balance: $600,000 Interest rate: 4.85% Frequency:monthly Time: 17 years
A deposit X is to be made today and a second deposit, which is twice the first, is to be made 3 years from now, to provide for withdrawals of $1,000 two years from now and $6,500 10 years from now. At an effective annual interest rate of 7%, calculate the size of the first deposit.
You have your choice of two investment accounts. Investment A is a 6-year annuity that features end-of-month $3,000 payments and has an interest rate of 8 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an interest rate of 10 percent, also good for 6 years. How much money would you need to invest in B today for it to be worth as much as Investment A 6 years from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value