Future value. Jack and Jill are saving for a rainy day and decide to put $45 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 10% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $700. Is there enough in the rainy-day fund to cover it? ..... a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? (Round to the nearest cent.)

Future value. Jack and Jill are saving for a rainy day and decide to put $45 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 10% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $700. Is there enough in the rainy-day fund to cover it? ..... a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? (Round to the nearest cent.)

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 4MC: Refer to the present value table information on the previous page. What amount should Brett have in...

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Future value. Jack and Jill are saving for a rainy day and decide to put $70 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 10% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $1,000. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? $nothing (Round to the nearest cent.) b. How much will they have in the account at the end of 10 years? $nothing (Round to the nearest cent.) Is there enough in the rainy day fund to cover the medical bill? (Select the best response.) A. There is not enough information to…
Future value. Jack and Jill are saving for a rainy day and decide to put $65 away in their local bank every year for the next 25 years. The local Up-the-Hill Bank will pay them 9% on tair account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 25 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $900. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year. how much will they have in it at the end of 25 years? (Round to the nearest cent.)
Future value. Jack and Jill are saving for a rainy day and decide to put $40 away in their local bank every year for the next 20 years. The local Up-the-Hill Bank will pay them 6% on their account. a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 20 years? b. Unfortunately, Jack had an accident in which he sustained head injuries after only 10 years of savings. The medical bill has come to $400. Is there enough in the rainy-day fund to cover it? a. If Jack and Jill put the money in the account faithfully at the end of every year, how much will they have in it at the end of 20 years? $nothing (Round to the nearest cent.)
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Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual withdrawals of $2000 can be made before depleting the funds. If the first withdrawal is made in year 1 after the deposit and if the bank provides an interest rate of 5% per year, how much money should be deposited now? What if Troy decides to withdraw all that he has deposited in the bank now, 5 years later, how much money should he expect to get with an interest rate of 5%? Draw the cash flow diagram. 2.
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15) Erika opened a savings account today and she immediately put $10,000 into it. She plans to contribute another $20,000 one year from now, and $50,000 two years from now. The savings account pays a 6 percent annual interest rate. If she makes no other deposits or withdrawals, how much will she have in the account 10 years from today?
Your friend is celebrating her birthday and wants to start saving for retirement. She has provided you with the following information: Years until retirement: 30 • Amount to withdraw each year in retirement: $120,000 • Years to withdraw in retirement: 12 Interest rate while saving: 9% . Interest rate in retirement: 6% Saved today (nest egg): $25,000 . . The first deposit will be made one year from today, and the last deposit will be made on the day she retires. Her first withdrawal will not occur until one year after she retires, and she plans to spend her entire nest egg. Suppose your friend has just inherited a large sum of money. Rather than making equal annual payments, she has decided to make one lump-sum deposit today to cover her retirement needs. She plans to spend what she has currently saved today on a new car. Calculate the amount she must deposit today to reach her retirement goal. (Round to 2 decimals)
a. A friend of yours, Grace, wants to purchase a house in five years. To save for the house, Grace decides to deposit $138,000 in a savings account on January 1 of this year. The savings account will earn 7 percent annually. Any interest earned will be added to the fund at year-end (rather than withdrawn). b. At the end of each year, a different friend, Claire, plans to deposit $10,300 in a savings account. The account will earn 10 percent annual interest, which will be added to the fund balance at year-end. Claire will make her first deposit at the end of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) Note: Use appropriate factor(s) from the tables provided. Required: 1. In (a), how much will be available at the end of five years? What is the total interest earned over the five years? 2. In (b), what will be the balance in the savings account at the end of the 8th year (i.e., after 8 deposits)? What is the interest earned on the 8 deposits?
• Starting next year, Moussa Al Khatib will need $10,000 annually for 4 years to complete his education. • This means that one year from today he will withdraw the first $10,000. • Moussa’s father deposits an amount today in a bank paying 5% annual interest, which will provide the needed $10,000 payments. a. How large must the deposit be? b. How much will be in Moussa’s account immediately after he makes the first withdrawal?
A couple thinking about retirement decide to put aside $2,400 each year in a savings plan that earns 7% interest. In 10 years they will receive a gift of $26,000 that also can be invested. a. How much money will they have accumulated 30 years from now? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. If their goal is to retire with $740,000 of savings, how much extra do they need to save every year?