Question 13You are currently paying $325 in interest on your credit cards annually. If, instead ofpaying interest, you saved this amount every year, how much would you accumulatein a tax-deferred account earning 8% over the next 5 years?Your Answer:Answer

Since its a tax deferred account, no tax will be paid in intermediate years. Instead of paying…

Answered: Question 13 You are currently paying…

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 want to be able to withdraw $30,000 each year for 15 years. Your account earns 6% interest. How much do you need in your account at the beginning?
a. You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually? b. You have a $20,000 note payable which is due in three years. How much money must you put into a savings account today in order to have enough money to pay off the debt on time assuming your savings account earns 3% interest compounded annually? c. You put $2,750 into an account earnings 4% interest compounded QUARTERLY. How much will be in this account at the end of 4 YEARS? d. In question “b." above, if you leave he money in the account for one more YEAR, how much more interest will you earn in that additional year (Year 5)? e. How long will it take to double $2,000 to $4,000 assuming you invest the $2,000 into an account earning 7% interest compounded annually?
None
You will be earning $1,200 in salary every month, if you decide to put half of that in your savings account that pays you 6% in interest, how much will you have saved up after 11 years? Select one: a.$290,860.98 b.$111,793.58 O c.$231,793.58 d.$463,587.15
f you saved your tax refund $14,089.39, quit buying vendor coffee for one year $12,522.23, and decided to contribute $5,040 (you saved $420 per month) in your Roth IRA, how much would you have for retirement if you could invest these savings at 7% compounded annually for 30 years for this one year of savings? (Use the Table 12.1 provided.) Note: Round your answer to two decimal places. Amount saved for Retirement
20
Suppose you deposit $4,000 in a savings account paying 10% simple interest. How much money will you have in your account after 4 years?
M7
Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. You need money today to start a new business, and your uncle offers to give you $160,000 for the annuity. If you sell it, what rate of return would your uncle earn on his investment? O 2.28% O 2.20% O 2.22% 2.33% 2.59%
You want to withdraw $30,000 a year for 30 years. Your account earns 12% interest. How much do you need in the account to be able to do this? A) $241,655.52 B) $231,647.39 C) $245,723.12 D) $198,789.56
You want to be able to withdraw $25,000 each year for 20 years. Your account earns 10% interest. A.How much do you need in your account at the beginning? b) How much total money will you pull out of the account? c) How much of that money is interest?
1. Find FV: You have $2,000 in a savings account that earns 1.5% interest per year. What will be the balance in your account: in one year? in five years? in ten years? 2. Find r: You have $2,000 in a money market account. If you make no deposits to or withdrawals from this account, in 10 years you will have: $10,000 in this account if the account's interest rate is $20,000 in this account if the account's interest rate is

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Question 13 You are currently paying $325 in interest on your credit cards annually. If, instead of paying interest, you saved this amount every year, how much would you accumulate in a tax-deferred account earning 8% over the next 5 years? Your Answer: Answer