Question 5.With reference to the sinking fund formula, calculate the amount of money should be depositedevery year in a savings account starting 1 year from now at a rate of 5.5% per year in order toaccumulate $ 6,000 in 7 years from now. Plot all the relevant data appropriately on a cash-flowdiagram.

Payment per month refers to the amount which a borrower should at the end of each month or period to…

Answered: = sinking fund formula, calculate the

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 10EB: You have been depositing money into an account yearly based on the following investment amounts,...

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4. ( Fund A earns interest at a simple rate of i% a year. $P is invested in fund A. (a) What is the accumulated value in fund A at time t years. (b) Calculate the effective rate of interest in year 1, year 2 and year 3. Solution:
A project has the following cash flows set out below. What is the profitability index of this project if the relevant discount rate is 2 percent? Enter your final answer to two decimal places. Year Cash flow 0 -1,745 1 537 2 2,066 3 3,912
Attach a complete solution. Draw the cash flow diagram.Suppose that P 4500 is deposited each year into a bank account that pays 8% interest compounded quarterly. How much would be accumulated in his fund by the end of the 4th year? The first payment occurs at time zero (now).
Using ume value of money tables, calculate the following. (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C., Exhibit 1-D) Note: Use approprlate factor(s) from the tables provided. a. The future value of $490 six years from now at 5 percent. b. The future value of $600 saved each year for 10 years at 7 percent c. The amount a person would have to deposit today (present value) at an interest rate of 7 percent to have $900 five years from now. d. The amount a person would have to deposit today to be able to take out $600 a year for 10 years from an account earning 9 percent. Complete this question by entering your answers in the tabs below. The future value of $600 saved each year for 10 years at? percent. Noter Round time value factor to 3 decimal place and finafapswes to 2 decimal places.
Using the sinking fund formula or a financial calculator, complete the following: (Do m answer to the nearest cent.) $ Required amount 24,900 Frequency of payment Quarterly Length of time 7 years Interest rate 8 % Payment amount end of each period
Please
Number of years to provide a given return In the information given in following case, determine the number of years that the given oridinary annuity cash flows must continue in order to provide the rate of return on the initial amount. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.) Initial amount $112,100 Annual cash flow $25,622 Rate of return C 5% The number of investment years, n, is years. (Round to two decimal places.)
In the information given int he following case, determine the number of years that the given oridinay annuity cash flows must continue inorder to provide the rate of return on the intial amount. Initial amount: $26,800 Annual Cash Flow: $6,561 Rate of Return: 6%
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Solve by using the sinking fund or amortization formula. (Round your answer to the nearest cent.) Sinking fund payment (in $) Sinking FundPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Future Value(Objective) $ every 3 months 4 6.0 quarterly $7,000
What is the present value of the following cash flows if the discount rate is at 5%? You receive 100 today, 200 in each of next 3 years (Year 1,2,3) and 150 in each of the next following 2 years (Year 4,5)? Enter your answer in absolute number with 2 decimal places.
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