Chelsea invested the profit of his business inan investment fund that was earning 2.50%compounded monthly. In 4 years, he beganwithdrawing $3,000 from this fund at the endof every 6 months. If the money in the fundlasted for the next 6 years, how much moneydid he initially invest in the fund?Please include a well-labelled timelinediagram. Full solutions should be shown onseparate sheets of paper. Submit yoursolutions.$Round to the nearest cent

More is the compounding of interest than more is effective interest rate and more is the future…

Chelsea invested the profit of his busin an investment fund that was earning 2 compounded monthly. In 4 years, he b withdrawing $3,000 from this fund at of every 6 months. If the money in the asted for the next 6 years, how much did he initially invest in the fund?

Chelsea invested the profit of his busin an investment fund that was earning 2 compounded monthly. In 4 years, he b withdrawing $3,000 from this fund at of every 6 months. If the money in the asted for the next 6 years, how much did he initially invest in the fund?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 12EB: Your friend has a trust fund that will pay her the following amounts at the given interest rate for...

See similar textbooks

Related questions

Q: Calculate the amount in the fund at the end of 3 years.

A: Time value of money means that the amount of money received in the present period will have more…

Q: Brianna invested the profit of his business in an investment fund that was earning 3.75% compounded…

A: Present value refers to an amount that is being invested initially in the investment for a definite…

Q: Jin decided to sell their farm and to deposit the fund in a bank. After computing the interest, they…

A: The provided information are: Withdrawal amount=P480000 for 8 years Starting at the end of 6 years…

Q: Mr. and Mrs. Revilla decided to sell their house and to deposit the fund in a bank. After computing…

A: The amount deposited in the fund is the present value of the annuity. It is the discounted value of…

Q: carlos Contributed equal deposit at the end of every month for four years into an investment fund he…

A: Monthly Compounding Interest Rate = 4.81%/12 per month Total Time Period = 7 years Time period of…

Q: Vincent invested his savings into a Registered Retirement Savings Plan (RRSP) at an interest rate of…

A: Interest Rate(Compounded semi-annually) 3.50% Future Value After 1 Year $…

Q: Exactly six years ago, Jay started investing $10,500 per year in an account that earned 5.00% p.a.…

A: To calculate how much Jay will have in his account exactly seven years from today, we can break down…

Q: Lisa invested $5000 in a fund for 5 years and was paid simple interest. The total interest that she…

A: P = $5000 T = 5 SI = $1000 Where, P = Principal T = Time (No. of years) SI = Simple Interest

Q: AC entered into an investment fund four years ago. The investment fund has an interest rate of 3%…

A: Interest rate is 3% compounded quaterly for first 4 years Interest rate for next 5 years us 4.5…

Q: Steven invested the profit of his business in an investment fund that was earning 3.50% compounded…

A: Present value refers to an amount that is being invested initially in the investment for a definite…

Q: Sarah deposited $26,500 into a fund at the beginning of every quarter for 16 years. He then stopped…

A: Compound interest= p*(1+r%/n)^tn A.) Around $358903 stacked up at the end of 16th year.

Q: Paige invested the profit of her business in an investment fund that was earning 3.75% compounded…

A: Present value is an estimate of the present value of future cash values that may be received at a…

Q: Your grandfather placed $5,000 in a trust fund for you. In 12 years, the fund will be worth $9,500.…

A: Initial Value = $5,000Final Value = $9,500Number of years (n) = 12We need to calculate the annually…

Q: Kayla contributed equal deposits at the end of every month for 4 years into an investment fund. She…

A: As per the given information: Interest rate - 3.92% compounded monthly Total time period - 8 years…

Q: Laura invested $650 at the end of every month in an investment fund that was earning interest at a…

A: The accumulated value of any fund is equal to the sum of future value of all the deposits made…

Q: Yoko invested s4000 in a fund for 2 years and was paid simple interest. The total interest that she…

A: Investment (P) = $4000 Period (T) = 2 Years Interest amount (I) = $400

Q: Katherine set up a fund that would pay his family $3,000 at the beginning of every month, in…

A: The given details are:Perpetual annuity: $3,000 at the beginning of every month.APR: 3% compounded…

Q: Amanda invested the profit of her business in an investment fund that was earning 3.25% compounded…

A: The PV of an investment refers to the combined value of the cash flows of the investment assuming…

Q: Kristen invested the profit of her business in an investment fund that was earning 3.25% compounded…

A: The future value of amount includes the amount being deposited and amount of compounding interest…

Q: On January 1, Alan King decided to transfer an amount from his checking account into aninvestment…

A: Present value: It refers to the current value of the sum of money or the series of cash flows that…

Q: Gil decided to sell their farm and to deposit the fund in a bank. After computing the interest, he…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: Miguel deposited $11,500 into a fund at the beginning of every quarter for 15 years. He then stopped…

A: The objective of the question is to calculate the accumulated value of the fund at the end of…

Q: Mr. Canlapan deposited his money from selling his old vehicle. The fund would allow him to withdraw…

A: Determine the value of the fund deposited after a year using the Excel PV function with the…

Q: Matthew invested the profit of his business in an investment fund that was earning 3.75% compounded…

A: Data given: APR( monthly) = 3.75% Semi-annual withdrawal = $ 2500 No.of years to first withdrawal =…

Q: Rodel decided to sell their farm and to deposit the fund in a bank. After computing the interest,…

A: Given:Withdrawl amount=P480000 for 8 yearsStarting at the end of 6 years (It is the time of his…

Q: sonia which to establish a trust fund from which her son can withdrew $6000 every six months for…

A: Trust fund:A trust fund is a financial arrangement in which a trustee holds assets such as cash,…

Q: Vanessa deposited $16,000 into a fund at the beginning of every quarter for 11 yea She then stopped…

A: Future value of annuity include the amount being deposited and amount of compounding interest being…

Q: onica invested the profit of his business in an investment fund that was earning 2.75% compounded…

A: Basis concept of time value of money has been applied, where amortisation schedule are prepared on…

Q: Erik invested $575 at the end of every month in an investment fund that was earning interest at a…

A: a. For 6 Months Erik invested $575 every months at rate 4.20% time 6 years therefore this is the…

Q: Tyler invested the profit of her business in an investment fund that was earning 3.75% compounded…

A: Present Value: The present value is the present sum of a series of fixed payments. The series of…

Question

Chelsea invested the profit of his business in
an investment fund that was earning 2.50%
compounded monthly. In 4 years, he began
withdrawing $3,000 from this fund at the end
of every 6 months. If the money in the fund
lasted for the next 6 years, how much money
did he initially invest in the fund?
Please include a well-labelled timeline
diagram. Full solutions should be shown on
separate sheets of paper. Submit your
solutions.
$
Round to the nearest cent

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

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Money Management and Achieving Financial Goals

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

Kristen invested the profit of her business in an investment fund that was earning 3.25% compounded monthly. In 5 years, she began withdrawing $4,500 from this fund at the end of every 6 months. If the money in the fund lasted for the next 4 years, how much money did she initially invest in the fund? Please include a well-labelled timeline diagram. Full solutions should be shown on separate sheets of paper. Submit solutions. $ Round to the nearest cent your
please help me get the correct answer for this question. please make sure its the right answer asap please.
Please see attachment and type in the correct answer ASAP with proper explanation of the each sub question given in the attachment. Will give you thumbs up only for the correct answer. Thank you
Tiffany has accumulated $60,000 in a mutual fund. If she continues to deposit $300 at the beginning of every month from her salary into the fund for the next 10 years, how much money will she have at the end of 10 years if the fund earns 4.45% compounded monthly? Please include a well-labelled timeline diagram. Full solutions should be shown on separate sheets of paper. Submit your solutions. Answer: Round to the nearest cent
Hal wants to establish a savings fund from which a community organization could draw $890 a year for 20 years. If the account earns 2.5 percent annual interest, what amount does he have to deposit now to achieve this goal? Use Exhibit 1B-4. (Round time value factors to 3 decimal places and final answer to the nearest dollar amount. Omit the "$" sign in your response.) Amount to be deposited $
Steven invested the profit of his business in an investment fund that was earning 3.50% compounded monthly. He began withdrawing $2,500 from this fund every 6 months, with the first withdrawal in 3 years. If the money in the fund lasted for the next 4 years, how much money did he initially invest in the fund? $ Round to the nearest cent.
Matthew invested the profit of his business in an investment fund that was earning 3.75% compounded monthly. He began withdrawing $2,500 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 3 years, how much money did he initially invest in the fund? $ $0.00 Round to the nearest cent
Brianna invested the profit of his business in an investment fund that was earning 3.75% compounded monthly. In 4 years, he began withdrawing $4,000 from this fund at the end of every 6 months. If the money in the fund lasted for the next 5 years, how much money did he initially invest in the fund? $ Round to the nearest cent
Monica invested the profit of his business in an investment fund that was earning 2.75% compounded monthly. He began withdrawing $3,500 from this fund every 6 months, with the first withdrawal in 4 years. If the money in the fund lasted for the next 5 years, how much money did he initially invest in the fund?
Mr. Deneau accumulated $98000 in an RRSP. He converted the RRSP into a RRIF and started to withdraw $5400 at the end of every three months from the fund. If interest is 4.1% compounded annually, for how long can Mr. Deneau make withdrawals? State your answer in years and months (from 0 to 11 months).
Please solve as soon as possible
carlos Contributed equal deposit at the end of every month for four years into an investment fund he then decided to stop making payments and left the money in the fund to grow for another three years the fan was earning 4.81% compounded monthly for the entire period and then accumulated amount at the end of the term was $80,000 a. calculate the amount in the fund at the end of the four years. b. calculate the size of the periodic deposit into the fund.