Mr. Chips, Inc. wishes to accumulate $1,200,000 to be used to pay off a balloon note at the end of 5 years.How much will Mr. Chips need to invest today to accumulate the desired amount if the investment earns an annual rate of 8% compounded quarterly? (Select the closest amount.)Select one:O A. $807,564OOOB. $1,086,877C. $257,458D. $1,783,167

The present value formula is used to compute the today’s value of $1 being paid or received in the…

Answered: Mr. Chips, Inc. wishes to accumulate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You got $80,000 as a gift. Rather than give you a lump sum, you are given the gift as an annuity that pays $6,500 per quarter. You will receive the first payment at the end of the second quarter. If the quarterly interest rate is 4%, how many quarters does it take for you to receive all the payments for this gift? calculations please (not excel) thank you
Here are two ways of investing $40,000 for 20 years. Lump-Sum Deposit Rate Time $40,000 5% compounded annually 20 years Periodic Deposit Rate Time $2000 at the end of each year 5% compounded annually 20 years Use this information and the formulas A=P(1+r)t and A=P(1+r)t−1r to complete parts a. and b. below.
A corporation creates a sinking fund in order to have $910,000 to replace some machinery in 9 years. How much should be placed in this account at the end of each month if the annual interest rate is 5.7% compounded monthly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years How much interest was earned during the third month of the 4th year? $
A corporation creates a sinking fund in order to have $910,000 to replace some machinery in 8 years. How much should be placed in this account at the end of each month if the annual interest rate is 6.8% compounded monthly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years S 4 years S 6 years S How much interest was earned during the second month of the 6th year? S
A downtown bank promises its potential employees a $ 8000 sign-on bonus, an additional bonus of $ 12000 two years from now, an additional bonus of $ 19000 four years from now, and an additional bonus of $ 23000 six years from now. Lavanya was hired today but only intends to work for this bank for three years. What is the present value of this bonus payment structure to her? (Assume that money is worth 8% p.a. compounded quarterly)
A corporation creates a sinking fund in order to have $510,000 to replace some machinery in 12 years. How much should be placed in this account at the end of each quarter if the annual interest rate is 6.3% compounded quarterly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the fourth quarter of the 5th year? $
4) Today, a civil association deposits 118,124 pesos obtained in donations in a financial instrument that grants an interest rate of 5.74% compounded monthly. After a while you will be able to have 11 monthly payments due of 17,333 pesos each. What is the grace period? Options: 98 100 95 88
A corporation creates a sinking fund in order to have $790,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each week if the annual interest rate is 5.8% compounded weekly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $ 6 years $ How much interest was earned during the fourth week of the 4th year?
Assume that Karen Williams desires to accumulate $1,000,000 in 15 years using her money market fund balance of $209,004. At what interest rate must Karen’s investment compound annually? (Round answer to 0 decimal places, e.g. 5%.) Interest rate %
Asma has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=4.67% p.a. She will make 10 annual repayments. According to the loan agreement, Asma's repayments will be $83,000 for the first two years followed by payments of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years. (b) Assume that all annual repayments will be paid at the beginning of each year (the first payment will be at the start of the first year), what is the value of Asma's annual payment amount, X (rounded to four decimal places)? Question 7Answer a. 134233.5495 b. 128177.7626 c. 127887.4496 d. 133859.7935
A company has had record profits and decided to use some of the profits to pay for manufacturing improvements. If the company can invest $1,600,000.00 in an a annuity will that will make payments at the beginning of every six months for 4 years. If the annuity pays 5.6%, compounded semi-annual. What is the size of payments that the company can expect?The payment amount will be $. (Round to 2 decimal places.)
Fifteen years ago, you deposited $12,500 into an investment fund. Five years ago, you added an additional $20,000 to that account. You earned 8%, compounded semi-annually, for the first ten years, and 6.5%, compounded annually, for the last five years. Required: a) What is the effective annual interest rate (EAR) you would get for your investment in the first 10 years? (2 marks) b) How much money do you have in your account today? (4 marks) c) If you wish to have $85,000 now, how much should you have invested 15 years ago? (4 marks)

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