Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $55,000 in three years? Annual interest rate is 10%. b. Assume that you are saving up for a trip around the world when you graduate in three years. If you can earn 6% on your investments, how much would you have to deposit today to have $15,000 when you graduate? (Round your answer to 2 decimal places.) c-1. Calculate the future value of an investment of $666 for ten years earning an interest of 9%. (Round your answer to 2 decimal places.) c-2. Would you rather have $666 now or $1,800 ten years from now?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from
the tables provided. Round your answer to the nearest whole dollar.)
a. How much would you have to deposit today if you wanted to have $55,000 in three years? Annual interest rate is 10%.
b. Assume that you are saving up for a trip around the world when you graduate in three years. If you can earn 6% on your
investments, how much would you have to deposit today to have $15,000 when you graduate? (Round your answer to 2 decimal
places.)
c-1. Calculate the future value of an investment of $666 for ten years earning an interest of 9%. (Round your answer to 2 decimal
places.)
c-2. Would you rather have $666 now or $1,800 ten years from now?
d. Assume that a college parking sticker today costs $80. If the cost of parking is increasing at the rate of 6% per year, how much will
the college parking sticker cost in seven years? (Round your answer to 2 decimal places.)
e. Assume that the average price of a new home is $123,500. If the cost of a new home is increasing at a rate of 7% per year, how
much will a new home cost in eight years? (Round your answer to 2 decimal places.)
f. An investment will pay you $10,000 in 9 years, and it also will pay you $300 at the end of each of the next 9 years (years 1 through
9). If the annual interest rate is 5%, how much would you be willing to pay today for this type of investment? (Round your intermediate
calculations and final answer to the nearest whole dollar.)
g. A college student is reported in the newspaper as having won $10,500,000 in the Kansas State Lottery. However, as is often the
custom with lotteries, she does not actually receive the entire $10.5 million now. Instead she will receive $525,000 at the end of the
year for each of the next 20 years. If the annual interest rate is 7%, what is the present value (today's amount) that she won? (ignore
taxes). (Round your answer to nearest whole dollar.)
a. Present value
b. Present value
c-1. Future value
c-2. Would you rather have $666 now or $1,800 ten years from now?
d. Future value
e. Future value
f. Present value
g. Present value
Ten years from now
Transcribed Image Text:Provided are links to the present and future value tables: (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to the nearest whole dollar.) a. How much would you have to deposit today if you wanted to have $55,000 in three years? Annual interest rate is 10%. b. Assume that you are saving up for a trip around the world when you graduate in three years. If you can earn 6% on your investments, how much would you have to deposit today to have $15,000 when you graduate? (Round your answer to 2 decimal places.) c-1. Calculate the future value of an investment of $666 for ten years earning an interest of 9%. (Round your answer to 2 decimal places.) c-2. Would you rather have $666 now or $1,800 ten years from now? d. Assume that a college parking sticker today costs $80. If the cost of parking is increasing at the rate of 6% per year, how much will the college parking sticker cost in seven years? (Round your answer to 2 decimal places.) e. Assume that the average price of a new home is $123,500. If the cost of a new home is increasing at a rate of 7% per year, how much will a new home cost in eight years? (Round your answer to 2 decimal places.) f. An investment will pay you $10,000 in 9 years, and it also will pay you $300 at the end of each of the next 9 years (years 1 through 9). If the annual interest rate is 5%, how much would you be willing to pay today for this type of investment? (Round your intermediate calculations and final answer to the nearest whole dollar.) g. A college student is reported in the newspaper as having won $10,500,000 in the Kansas State Lottery. However, as is often the custom with lotteries, she does not actually receive the entire $10.5 million now. Instead she will receive $525,000 at the end of the year for each of the next 20 years. If the annual interest rate is 7%, what is the present value (today's amount) that she won? (ignore taxes). (Round your answer to nearest whole dollar.) a. Present value b. Present value c-1. Future value c-2. Would you rather have $666 now or $1,800 ten years from now? d. Future value e. Future value f. Present value g. Present value Ten years from now
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Effective Annual Rate Of Return
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
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education