ufficient funds to pay a $400,000 debt that comes du ing five equal annual deposits to an account paying the first deposit is made on December 31, 2024. ased an office building. Terms of the lease require Sto
ufficient funds to pay a $400,000 debt that comes du ing five equal annual deposits to an account paying the first deposit is made on December 31, 2024. ased an office building. Terms of the lease require Sto
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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2. Stone needs to accumulate sufficient funds to pay a $400,000 debt that comes due on December 31, 2029. The company will
accumulate the funds by making five equal annual deposits to an account paying 6% interest compounded annually. Determine
the required annual deposit if the first deposit is made on December 31, 2024.
3. On January 1, 2024, Stone leased an office building. Terms of the lease require Stone to make 20 annual lease payments of
$120,000 beginning on January 1, 2024. A 10% interest rate is implicit in the lease agreement. At what amount should Stone
record the lease liability on January 1, 2024, before any lease payments are made?
Note: For all requirements, Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD
of $1)
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Table, Excel, or calculator function:
Future Value:
X Answer is complete but not entirely correct.
Stone needs to accumulate sufficient funds to pay a $400,000 debt that comes due on December 31, 2029. The company will
accumulate the funds by making five equal annual deposits to an account paying 6% interest compounded annually.
Determine the required annual deposit if the first deposit is made on December 31, 2024.
Note: Round your final answers to nearest whole dollar amount.
Annual deposit:
Required 3
n =
j =
Table, Excel, or calculator function
FVAD of $1
$
GA
400,000
5
6%
70,959 X
Show less A
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