What amount would you have if you deposited $2,500 a year for 25 years at 8 percent (compounded annually)? Round time value factor to 3 decimal places and final answer to 2 decimal places. Exhibit 1-D Present Value of $1 Received at the End of Each Period for a Given Number of Time Periods (anAnnuity)Period1234567891011121314151617181920253040501%0.9901.9702.9413.9024.8535.7956.7287.6528.5669.47110.36811.25512.13413.00413.86514.71815.56216.39817.22618.04622.02325.80832.83539.1962%0.9801.9422.8843.8084.7135.6016.4727.3258.1628.9839.78710.57511.34812.10612.84913.57814.29214.99215.67816.35119.52322.39627.35531.4243%0.9711.9132.8293.7174.5805.4176.2307.0207.7868.5309.2539.95410.63511.29611.93812.56113.16613.75414.32414.87717.41319.60023.11525.7304%0.9621.8862.7753.6304.4525.2426.0026.7337.4358.1118.7609.3859.98610.56311.11811.65212.16612.65913.13413.59015.62217.29219.79321.4825%0.9521.8592.7233.5464.3295.0765.7866.4637.1087.7228.3068.8639.3949.89910.38010.83811.27411.69012.08512.46214.09415.37217.15918.2566%0.9431.8332.6733.4654.2124.9175.5826.2106.8027.3607.8878.3848.8539.2959.71210.10610.47710.82811.15811.47012.78313.76515.04615.7627%0.9351.8082.6243.3874.1004.7675.3895.9716.5157.0247.4997.9438.3588.7459.1089.4479.76310.05910.33610.59411.65412.40913.33213.8018%0.9261.7832.5773.3123.9934.6235.2065.7476.2476.7107.1397.5367.9048.2448.5598.8519.1229.3729.6049.81810.67511.25811.92512.233SAWWNHO.012334555667778880066∞∞ ∞8899101010

The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Answered: What amount would you have if you…

What amount would you have if you deposited $2,500 a year for 25 years at 8 percent (compounded annually)? Round time value factor to 3 decimal places and final an

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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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

What amount would you have if you deposited $2,500 a year for 25 years at 8 percent (compounded annually)?

Round time value factor to 3 decimal places and final answer to 2 decimal places.

Exhibit 1-D Present Value of $1 Received at the End of Each Period for a Given Number of Time Periods (an
Annuity)
Period
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
25
30
40
50
1%
0.990
1.970
2.941
3.902
4.853
5.795
6.728
7.652
8.566
9.471
10.368
11.255
12.134
13.004
13.865
14.718
15.562
16.398
17.226
18.046
22.023
25.808
32.835
39.196
2%
0.980
1.942
2.884
3.808
4.713
5.601
6.472
7.325
8.162
8.983
9.787
10.575
11.348
12.106
12.849
13.578
14.292
14.992
15.678
16.351
19.523
22.396
27.355
31.424
3%
0.971
1.913
2.829
3.717
4.580
5.417
6.230
7.020
7.786
8.530
9.253
9.954
10.635
11.296
11.938
12.561
13.166
13.754
14.324
14.877
17.413
19.600
23.115
25.730
4%
0.962
1.886
2.775
3.630
4.452
5.242
6.002
6.733
7.435
8.111
8.760
9.385
9.986
10.563
11.118
11.652
12.166
12.659
13.134
13.590
15.622
17.292
19.793
21.482
5%
0.952
1.859
2.723
3.546
4.329
5.076
5.786
6.463
7.108
7.722
8.306
8.863
9.394
9.899
10.380
10.838
11.274
11.690
12.085
12.462
14.094
15.372
17.159
18.256
6%
0.943
1.833
2.673
3.465
4.212
4.917
5.582
6.210
6.802
7.360
7.887
8.384
8.853
9.295
9.712
10.106
10.477
10.828
11.158
11.470
12.783
13.765
15.046
15.762
7%
0.935
1.808
2.624
3.387
4.100
4.767
5.389
5.971
6.515
7.024
7.499
7.943
8.358
8.745
9.108
9.447
9.763
10.059
10.336
10.594
11.654
12.409
13.332
13.801
8%
0.926
1.783
2.577
3.312
3.993
4.623
5.206
5.747
6.247
6.710
7.139
7.536
7.904
8.244
8.559
8.851
9.122
9.372
9.604
9.818
10.675
11.258
11.925
12.233
SAWWNHO.
0
1
2
3
3
4
5
5
5
6
6
7
7
7
8
8
8
0066∞∞ ∞
8
8
9
9
10
10
10

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