It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a. If the bank compounds interest annually, how much will you have in your account on January 1, 20x9? b. What will your January 1, 20x9 balance be if the bank uses quarterly compounding

It is now January 1, 20x8. Today you will deposit P100,000 into a savings account that pays 8%. a. If the bank compounds interest annually, how much will you have in your account on January 1, 20x9? b. What will your January 1, 20x9 balance be if the bank uses quarterly compounding

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EB: You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how...

See similar textbooks

Related questions

Q: You plan to make a total of 7 deposits of $11,000 each year with the first payment being made one…

A: Future Value of Annuity = Future Value = P x (1+i)n

Q: You currently have $4,000 in a bank account that pays a nominal rate of 1%, compounded monthly. You…

A: The interest that is calculated on all the accumulated interest of previous years or months plus…

Q: future value of your money in 17 years.

A: Future Values: Future value is the value that will be increased or decreased after a particular…

Q: Suppose on January 1st you deposit $100 in an account that pays a nominal interest rate of 11.33463%…

A: Principal, P = $ 100Nominal interesr rate = Inom = 11.33463% Daily interest rate, Rdaily = Inom /…

Q: You plan to deposit $4,000 today, $2,000 in one year and $4,000 in two years into an account earning…

A: Here, Deposit Amount today (D0) is $4,000 Deposit Amount in One Year (D1) is $2,000 Deposit Amount…

Q: What is the value (in $) of Jorge's account after 16 months? (Round your answer to the nearest…

A: Information Provided: payment made = $150 Term = 16 months Interest rate = 6% compounded monthly

Q: 27. You hope to accumulate an account balance of $20,000 in 4 years by making a single deposit…

A: We need to calculate the amount to be deposited today - present value (PV)Future Value (FV) =…

Q: Best Bank pays 6% interest rate compounded monthly. However, your deposit will be annually. Your…

A: Formula to be used:- A= P(1+r/12)^12n Where A= Future value, P= Present value, r= rate of interest…

Q: 3. Compound interest Old Time Savings Bank pays 4% interest on its savings account. If you deposit…

A: The objective of the question is to calculate the compound interest earned in the first, second and…

Q: You deposit $ 7,812 in your account today. You make another deposit at t = 1 of $ 6,946 . How much…

A: Future value is a financial concept that calculates the value of an investment at a future date,…

Question

Video Video

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

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

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

You put $600 in the bank for 3 years at 15%. 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 third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
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.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
You deposit $296 today into a bank account that earns 12% annually. How much will be in your account after 25 years? note: show your answer to the nearest dollar (round to nearest dollar).
PLEASE SOLVE ALL PART. Problem 2 Assume that it is now January 1, 2022. On January 1, 2023, you will deposit Rs 1,000 into a savings account that pays 8 percent. a.If the bank compounds interest annually, how much will you have in your account on January 1, 2026?b.What would your January 1, 2026, balance be if the bank used quarterly compounding rather than annual compounding?c.Suppose you deposit the Rs 1,000 in 4 payments of Rs 250 each on January 1 of 2022, 2023, 2024, and 2025. How much would you have in your account on January 1, 2026, based on 8 percent annual compounding?d.Suppose you deposit 4 equal installments in your account on January 1 of 2023, 2024, 2025, and 2026. Assuming an 8 percent interest rate, how large would each of your payments have to be for you to obtain the same ending balance as you calculated in part (a)?
You plan to deposit $500 in a bank account now and $600 at the end of the year. If the account earns7% interest per year, what will be the balance in the account right after you make the second deposit?
If your bank pays you 1.5% interest and you deposit $700 today, what will be your balance in seven years? The bank balance will be $ ______.(Round to the nearest cent.)
You plan to deposit S500 in a bank account now and S400 at the end of the year. If the account earns 4% interest per year, what will the balance be in theaccount right after you make the second deposit?
You plan to deposit $700 in a bank account now and $900 at the end of one year. If the account earns 2% interest per year, what will the balance be in the account right after you make the second deposit? There will be $ in the account right after the second deposit. (Type an integer or a decimal.)
if you deposit $17,000 in the bank today, you will be able to withdraw $24,000 from the account in six years. what is the implied rate that the back is paying?