Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,400 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account? $ B. If you place $6,200 in a savings account, how much will you have at the end of 8 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why? Take the lump sum $740,000 because it is more money.
Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,400 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account? $ B. If you place $6,200 in a savings account, how much will you have at the end of 8 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why? Take the lump sum $740,000 because it is more money.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
CH11 Q1
Transcribed Image Text:Use the present value and future value tables to answer the following questions.
A. If you would like to accumulate $2,400 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account?
$
B. If you place $6,200 in a savings account, how much will you have at the end of 8 years with a 12% interest rate?
$
C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years?
$
D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Take the lump sum $740,000 because it is more money.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education