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Question Content Area Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,500 over the next 3 years when the interest rate is 15%, how much do you need to deposit in the account? $fill in the blank 1 B. If you place $6,300 in a savings account, how much will you have at the end of 8 years with a 12% interest rate? $fill in the blank 2 C. You invest $9,000 per year for 9 years at 12% interest, how much will you have at the end of 9 years? $fill in the blank 3 D. You win the lottery and can either receive $740,000 as a lump sum or $60,000 per year for 19 years. Assuming you can earn 8% interest, which do you recommend and why? Please round off answers

Question Content Area Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,500 over the next 3 years when the interest rate is 15%, how much do you need to deposit in the account? $fill in the blank 1 B. If you place $6,300 in a savings account, how much will you have at the end of 8 years with a 12% interest rate? $fill in the blank 2 C. You invest $9,000 per year for 9 years at 12% interest, how much will you have at the end of 9 years? $fill in the blank 3 D. You win the lottery and can either receive $740,000 as a lump sum or $60,000 per year for 19 years. Assuming you can earn 8% interest, which do you recommend and why? Please round off answers

FINANCIAL ACCOUNTING
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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  • Question Content Area

    Use the present value and future value tables to answer the following questions.

    A. If you would like to accumulate $2,500 over the next 3 years when the interest rate is 15%, how much do you need to deposit in the account?

    $fill in the blank 1

    B. If you place $6,300 in a savings account, how much will you have at the end of 8 years with a 12% interest rate?

    $fill in the blank 2

    C. You invest $9,000 per year for 9 years at 12% interest, how much will you have at the end of 9 years?

    $fill in the blank 3

    D. You win the lottery and can either receive $740,000 as a lump sum or $60,000 per year for 19 years. Assuming you can earn 8% interest, which do you recommend and why?

    • Please round off answers
    •  
Present Value of $1 Table 1 Factor = (1 + i)" Rate (i) 1% 2% 3% 5% 8% 10% 12% 15% 20% 1 0.990 0.980 0.971 0.952 0.926 0.909 0.893 0.870 0.833 2 0.980 0.961 0.943 0.907 0.857 0.826 0.797 0.756 0.694 3 0.971 0.942 0.915 0.864 0.794 0.751 0.712 0.658 0.579 4 0.961 0.924 0.888 0.823 0.735 0.683 0.636 0.572 0.482 0.952 0.906 0.863 0.784 0.681 0.621 0.567 0.497 0.402 6. 0.942 0.888 0.837 0.746 0.630 0.564 0.507 0.432 0.335 7 0.933 0.871 0.813 0.711 0.583 0.513 0.452 0.376 0.279 8. 0.924 0.853 0.789 0.677 0.540 0.467 0.404 0.327 0.233 9. 0.914 0.837 0.766 0.645 0.500 0.424 0.361 0.284 0.194 10 0.905 0.820 0.744 0.614 0.463 0.386 0.322 0.247 0.162 11 0.896 0.804 0.722 0.585 0.429 0.350 0.287 0.215 0.135 12 0.888 0.788 0.701 0.557 0.397 0.319 0.257 0.187 0.112 13 0.879 0.773 0.681 0.530 0.368 0.290 0.229 0.163 0.093 14 0.861 0.758 0.661 0.505 0.340 0.263 0.205 0.141 0.078 15 0.861 0.743 0.642 0.481 0.315 0.239 0.183 0.123 0.065 16 0.853 0.728 0.623 0.458 0.292 0.218 0.163 0.107 0.054 17 0.844 0.714 0.605 0.436 0.270 0.198 0.146 0.093 0.045 18 0.836 0.700 0.587 0.416 0.250 0.180 0.130 0.081 0.038 19 0.828 0.686 0.570 0.396 0.232 0.164 0.116 0.070 0.031 20 0.820 0.673 0.554 0.377 0.215 0.149 0.104 0.061 0.026 Period (n)
Transcribed Image Text:Present Value of $1 Table 1 Factor = (1 + i)" Rate (i) 1% 2% 3% 5% 8% 10% 12% 15% 20% 1 0.990 0.980 0.971 0.952 0.926 0.909 0.893 0.870 0.833 2 0.980 0.961 0.943 0.907 0.857 0.826 0.797 0.756 0.694 3 0.971 0.942 0.915 0.864 0.794 0.751 0.712 0.658 0.579 4 0.961 0.924 0.888 0.823 0.735 0.683 0.636 0.572 0.482 0.952 0.906 0.863 0.784 0.681 0.621 0.567 0.497 0.402 6. 0.942 0.888 0.837 0.746 0.630 0.564 0.507 0.432 0.335 7 0.933 0.871 0.813 0.711 0.583 0.513 0.452 0.376 0.279 8. 0.924 0.853 0.789 0.677 0.540 0.467 0.404 0.327 0.233 9. 0.914 0.837 0.766 0.645 0.500 0.424 0.361 0.284 0.194 10 0.905 0.820 0.744 0.614 0.463 0.386 0.322 0.247 0.162 11 0.896 0.804 0.722 0.585 0.429 0.350 0.287 0.215 0.135 12 0.888 0.788 0.701 0.557 0.397 0.319 0.257 0.187 0.112 13 0.879 0.773 0.681 0.530 0.368 0.290 0.229 0.163 0.093 14 0.861 0.758 0.661 0.505 0.340 0.263 0.205 0.141 0.078 15 0.861 0.743 0.642 0.481 0.315 0.239 0.183 0.123 0.065 16 0.853 0.728 0.623 0.458 0.292 0.218 0.163 0.107 0.054 17 0.844 0.714 0.605 0.436 0.270 0.198 0.146 0.093 0.045 18 0.836 0.700 0.587 0.416 0.250 0.180 0.130 0.081 0.038 19 0.828 0.686 0.570 0.396 0.232 0.164 0.116 0.070 0.031 20 0.820 0.673 0.554 0.377 0.215 0.149 0.104 0.061 0.026 Period (n)
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