An investor is setting up a fund which requires 10 years of contributions. The investor pays £250 per month for 10 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 1%. What is the value of the fund after 10 years?

An investor is setting up a fund which requires 10 years of contributions. The investor pays £250 per month for 10 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 1%. What is the value of the fund after 10 years?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

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

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

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 10RE: If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32...

See similar textbooks

Related questions

Q: an electrical engineer desires to set up fund by making uniform monthly end of period deposits for a…

A: first calculate the value at the end of the decade FV = 0, N = 3, PMT = 250,000, rate = (1+6%/12)12…

Q: A loan of $50,000 is due 10 years from today. The borrower wants to make monthly payments at the end…

A: The payments made constantly without any uneven time gap are called annuity where nominal amount for…

Q: You are scheduled to receive Rs. 360,000 in two years. When you receive it, you will invest it for…

A: The future value function or concept can be used to determine the future value of a present sum or…

Q: You have invested 100per month@ 10% per annum in an endowment policy with liberty. After a period of…

A: Future value refers to the anticipated value of an investment or asset at a future point in time,…

Q: If $100 is deposited in a fund at the beginning of each 3 months for 8 years and the money is…

A: Quarterly deposit (C) = $100 Quarterly interest rate (r) = 0.0125 (i.e. 0.05 / 4) a. Number of…

Q: An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you…

A: Time value of money is a concept that deals with calculating the actual worth of money at present…

Q: 2: An investment fund is set up to make payments of $1,250 at the end of every month for 15 years.…

A: A series of payments made over a period with equal intervals of time is an annuity. The present…

Q: You deposit $600 today into a fund that you intend to leave invested for 6 years. The fund earns 6%…

A: Solution:When some amount is invested somewhere, it earns interest on it.The amount initially…

Q: you started making sinking fund deposit of 20000 today. its bank pays 6% compounded semi-annually…

A: Solution Given Present deposit 20000 Rate of interest 6% compounded semiannually…

Q: 2. An investor is setting up a fund which requires 20 years of contributions. The investor pays £50…

A: The FV of an annuity refers to the value of its cash flows at a particular future date assuming it…

Q: A fund is to be created which pays out a scholarship of £7,000 every year in perpetuity. The first…

A: Perpetuity are funds that are paid over the whole life period of annuities. Value of perpetuity is…

Q: 2. An investor is setting up a fund which requires 10 years of contributions. The investor pays £150…

A: An annuity is a financial product that provides a series of payments at regular intervals, typically…

Q: the periodic paymer necessary tő accumu the given amount in an annuity account. (Assume…

A: We use PMT function in excel to calculate monthly payments

Q: You deposit 20,000 today into a fund paying (i)=8%. From this fund, you receive 10 payments of R,…

A: Computation of R:

Q: Find the periodic payments PMT necessary to accumulate the given amount in an annuity account.…

A: Here, Particulars Values Accumulated amount in an annuity account (FV) $30,000.00 Present…

Q: Find the periodic payments PMT necessary to accumulate the given amount in an annuity account.…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the…

A: This is case of future value of annuity due. In annuity due equal periodic payments are made at the…

Q: An investment pays you $1000 at the end of each of the next 3 years. The investment will then pay…

A: Interest rate = 8% Calculation of present value Year Cash inflow PVF(8%,Year) Present value A…

Q: An company needs to make the following annuity payments into a pension fund: £1100 paid at the…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Q: An investor is setting up a fund which requires 18 years of contributions. The investor pays £100…

A: The money's time worth principle indicates that any sum of money is worth more currently as compared…

Q: An investment of 1000 is to be used to make payments of 100 at the end of every year for as long as…

A: It's a time value of money concept based question. The concept needs to be applied several times to…

Q: What is the value of the fund after 18 years? £ 数字 Enter an answer correct to 2 decimal places.

A: We need to break this question into 2 parts. First, we need to determine the FV of $200 per month…

Q: Sally Medavoy will invest $8,000 a year for 20 years in a fund that will earn 6% annual interest. If…

A: Annual investment = $8,000 Interest rate = 6% Number of years = 20 Future value of annuity when…

Q: An investment promises to pay you $40, 000 per year starting five years from today and continuing…

A: C = $40,000,r=0.10 (10% as a decimal), andn=12−5=7 (payments start from year 5 and continue until…

Q: You deposit 20,000 today into a fund paying ?(1)=8%. From this fund, you receive 10 payments of R,…

A: Under present value concept, present value is the current monetary value of the future receipt or…

Q: You invest £1,000 in a project and receive £252 at the end of each of the next 6 years. Calculate…

Q: TVM calculator, compare the following if the investment pays 7%/a compound annually and payments are…

A: Future value of investment include the compound interest and payment made for the future.

Q: You have invested $48, 800 in an investment fund. What amount can you withdraw from this fund in 10…

A: Maturity value is that amount which includes the interest earned on the investment. It is that…

Q: Fund X will earn interest at an effective annual rate of 10% for the first 30 years and 6%…

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

Q: 2. An investor is setting up a fund which requires 20 years of contributions. The investor pays £100…

A: The future value of an ordinary annuity is the value of a series of equal periodic payments at a…

Question

An investor is setting up a fund which requires 10 years of contributions. The investor pays £250 per month for 10 years. All payments are made in arrears,
i.e at the end of the period.
The effective annual rate i = 1%.
What is the value of the fund after 10 years?
£
Enter an answer correct to 2 decimal places.

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

Annuities:

VIEW

Calculate the future value as follows:

VIEW

Step by step

Solved in 2 steps with 1 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, finance and related others by exploring similar questions and additional content below.

Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?
An investor is setting up a fund which requires 18 years of contributions. The investor pays £200 per month for 15 years. After 15 years, the payments increase by £10 for the subsequent 3 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 2%. What is the value of the fund after 18 years? £ 数字 Enter an answer correct to 2 decimal places.
An investor is setting up a fund which requires 18 years of contributions. The investor pays £100 per month for 15 years. After 15 years, the payments increase by £20 for the subsequent 3 years. All payments are made in arrears, i.e at the end of the period. The effective annual rate i = 6%. What is the value of the fund after 18 years? £ Number Enter an answer correct to 2 decimal places.
Let the annual interest rate be 8%. Compute Enter an answer correct to 6 decimal places. 9| Enter an answer correct to 6 decimal places. A fund is to be created which pays out a scholarship of £1,000 every year in perpetuity. The first scholarship will be paid out in 4 years' time. Assuming an interest rate of 9%, how much should be paid into the fund? £ Enter an answer correct to 2 decimal places.
You deposit $600 today into a fund that you intend to leave invested for 6 years. The fund earns 6% interest compounded annually. Indicate the inputs to be entered into the financial calculator keys. What is the value of the fund to be accumulated at the end of year 6? (Round future value answer to two decimal places (e.g., 52.75) and interest rate to one decimal place (e.g., 527.5).) Inputs Calculator N Keys Future value $ 6 I 6 PV 600
I hope you could write the formula and process more clearly. Thank you so much
You invest money in a fund that paid 9% simple interest paid annually. If it is worth $21,200.00 in 11 months, a) what is the present value? $ b) What is the rate of return? (answer as a percent 2 decimal places)
An investor is considering two investment projects. Project A requires an initial payment of £19,000. In return, the investor will receive a payment of £27,100 after one year. Project B requires an initial payment of £10,800. In return, the investor will receive a payment of £1,490 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. %