Determine the future value of $10,000 under each of the following sets of assumptions: Annual Rate Period Invested Interest Compounded1. 10% 10 years Semiannually2. 12 5 years Quarterly3. 24 30 months Monthly

Determine the future value of $10,000 under each of the following sets of assumptions: Annual Rate Period Invested Interest Compounded1. 10% 10 years Semiannually2. 12 5 years Quarterly3. 24 30 months Monthly

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: Find the total number of compounding periods and the interest rate per period for the investment.…

A: Compounding is a process by which interest is increased on a specified principal with a specified…

Q: .If $1000 is deposited at 12.5% p.a. for one year, what is the effective annual interest rate if…

A: Given, The amount deposited is $1000 The annual rate is 12.5%

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Annuity refers to a stream of constant and usually fixed cash flows. Here the annual amount of $6200…

Q: Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if…

A: The concept of time value of money will be used and applied here. As per the concept of time value…

Q: In each situation described below, identify the initial payment, the term interest rate, and the…

A: The APR is the total amount of interest that is charged for the entire year. It provides a better…

Q: Use the compound interest formula for compounding more than once a year to determine the accumulated…

A: Here,Deposit Amount (PV) is $20,000APR (r) is 3.7%Time Period (n) is 32 yearsCompounding Period (m)…

Q: Using the appropriate PV table, compute the present value of the following amount: $24,000 payable…

A: Present value (PV) is the current value of a future sum of money or stream of cash flows given a…

Q: $4,000 every year 20 4

A: Present value of annuity is equivalent value today of the future payments to be received in the…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Present Value (PV) is a financial concept used to determine the current worth of a future sum of…

Q: Calculate the nominal annual rate of interest compounded quarterly that is equivalent to 10% p.a…

Q: Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of…

A: Annual interest rate = 12%Period = 5 yearsAnnual amount = $3200To find: PV of annuity when payments…

Q: What annual interest rate must be obtained to accumulate $10,000 in 8 years on an investment of…

A: The interest rate is compounding quarterly. Hence, it is important to understand that, annual rate…

Q: Calculate the future value of 6 payments at the end of the year of $10,000 with an annual interest…

A: 6 Payments at the end of the year = $10,000Interest rate = 8%Number of payments = 6

Q: Solve for the future value of $1,300 after 1 year invested at 4 percent if compounding is a) annual.…

A: Future value is the value of present investment in the future after compounding the present…

Q: the maturity value of a five-year, $4000 compound interest gic is $6275.42. to three-figure…

A: It is a compound interest gic. Hence, compounding effect will be there as same as future value of…

Q: Use the formula for computing future value using compound interest to determine the value of an…

A: Here, Principal Amount (PV) is $13,000 Annual Interest Rate (r) is 3% Compounding Period (m) is…

Q: Find the total number of compounding periods and the interest rate per period for the investment.…

A: Investments are the methods or processes through which various individual and businesses invest…

Q: If 28200 dollars is invested at an interest rate of 5 percent per year, find the value of the…

A: Expected value of the investment at the future date is known as the Value of Investment. Cash flow…

Q: Assume that $464.03 invested today will grow to $8,106.65 at the end of 47 quarters. Determine the…

A: Initial investment=$464.03Future value=8106.65Period=47 quarters

Q: Compute the compund interest of a $3000 investment for 15 years at an interest rate of 7.25%.

A: Compound interest means where interest is received on principal amount invested plus interest where…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Determine the future value of $10,000 under each of the following sets of assumptions:

Annual Rate Period Invested Interest Compounded
1. 10% 10 years Semiannually
2. 12 5 years Quarterly
3. 24 30 months Monthly

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

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

The amount of $10,000 is invested and will be worth $21,000 in nine years What is the cortiusly compounded nominal (annual) interest rate? Select one: O a. 8.2% O b. 7.7% C. 8.8% O d. 6.5% O e. 7.1%
Using annual, semiannual, and quarterly compounding periods, (1) calculate the future value if $6000 is deposited initially at 9% annual interest for 7 years, and (2) determine the effective annual rate (EAR).
Find the total number of compounding periods and the interest rate per period for the investment. Term ofInvestment Nominal(Annual) Rate (%) InterestCompounded CompoundingPeriods Rate perPeriod (%) 4 years 4.5 semiannually
For each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the future value factor. (1) In Table 1 (future value of 1): Number of Annual Rate Years Invested Compounded Case A 5% 5 Annually Case B 8% 6 Semiannually Case A Case B . (a) % % (2) In Table 2 (future value of an annuity of 1): Annual Rate Number of Years Invested Compounded Case A 6% 9 Annually Case B 8% 5 Semiannually Case A Case B (b) periods periods (a) (b) % periods % periods
Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the stated interest rate after the stated amount of time. 3% per year, compounded quarterly (4 times/year), after 7 years
Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $6,500 under each of the following situations: 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) 1. The payments are received at the end of each of the five years and interest is compounded annually. 2. The payments are received at the beginning of each of the five years and interest is compounded annually. 3. The payments are received at the end of each of the five years and interest is compounded quarterly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Deposit Date The payments are received at the end of each of the five years and interest is compour Note: Round your final answers to nearest whole dollar amount. First payment Second payment Third payment Fourth payment Fifth payment j= 3% 3% 3% 3% 3% Required 3 X Answer is complete but not entirely corre n= 4 ✓ $ 8 12 16 ✓…
A. Calculate the effective annual rate (EAR) in each of the following scenarios: b. APR = 10%, monthly compounding c. 4% semi-annual interest rate, monthly compounding d. 1.5% monthly interest rate, daily compounding e. 3% quarterly interest rate, annual compounding
if an investment pays interest at a rate of 8% compounded semi annually, then an investment of $1000 for 3 years would be found in a table using the future value of 1 table for a. 3 periods at 8% b. 8 periods at 3% c. 12 periods at 2 % d. 6 periods at 4%
1.Find the total number of compounding periods and the interest rate per period for the investment. Term ofInvestment Nominal(Annual) Rate (%) InterestCompounded CompoundingPeriods Rate perPeriod (%) 9 years 4 quarterly %