Mr. Gordon plans to invest $600 at the end of each month in an account that pays 12%, compounded monthly. After howmany months will the account be worth $50,000?(a) State whether the problem relates to an ordinary annuity or an annuity due.ordinary annuityannuity due(b) Solve the problem. (Round your answer UP to the nearest month.)months

a) An ordinary annuity may be a set of identical installments paid over an indicated sum of the time…

Answered: Mr. Gordon plans to invest $600 at the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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Similar questions

You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
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.
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
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.
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?
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
Mr. Gordon plans to invest $400 at the end of each month in an account that pays 6%, compounded monthly. After how many months will the account be worth $30,000? (a) State whether the problem relates to an ordinary annuity or an annuity due. (b) Solve the problem. (Round your answer UP to the nearest month.)
You would like to have $59,000 in 5 years for the down payment on a new house following graduation by making deposits at the end of every three months in an annuity that pays 4.25% compounded quarterly. (a) How much should you deposit at the end of every three months? (b) How much of the $59,000 comes from deposits? (c) How much of the $59,000 comes from interest? (Round UP to the nearest dollar. For example, $247) () af
You would Ilike to have $59,000 in 5 years for the down payment on a new house following graduation by making deposits at the end of every three months in an annuity that pays 4.25% compounded quarterly. (a) How much should you deposit at the end of every three months? (b) How much of the $59,000 comes from deposits? (c) How much of the $59,000 comes from interest? (Round UP to the nearest dollar. For example, $247) OPensyrooo n 21 l 1e0 (6)' s 6Tei 0hcc doirdW (b)Saaviz wDi 26. 7 1 0 59.000 6 00
An insurance settlement of $3 million must replace Trixie Eden's income for the next 30 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 8.1%, compounded monthly? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. ordinary annuityannuity due (b) Solve the problem. (Round your answer to the nearest cent.) $
An insurance settlement of $2.5 million must replace Trixie Eden's income for the next 40 years. What income will this settlement provide at the end of each month if it is invested in an annuity that earns 7.3%, compounded monthly? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. ordinary annuity annuity due (b) Solve the problem. (Round your answer to the nearest cent.)
Dean Gooch is planning for his retirement, so he is setting up a payout annuity with his bank. He wishes to receive a payout of $1,500 per month for twenty-five years. (a) How much money must he deposit if his money earns 7.3% interest compounded monthly? (Round your answer to the nearest cent.) (b) Find the total amount that Dean will receive from his payout annuity.

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