You will deposit money into a bank account according to the following schedule:today$425,0001 year from today$55,00011 years from today$56,50017years from today$22,000$124,30019 years from todayAfter 19 years from today, what will be the purchasing power of the money in your bank account, expressed intoday's dollars? Your bank pays interest at 4.0000% compounded yearly and inflation is expected to be 3.5000%per year.

Step 1:Calculate future values of each deposit:Deposit today ($425,000) remains $425,000 as there is…

Answered: You will deposit money into a bank…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

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You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
K You plan to deposit $700 in a bank account now and $100 at the end of the year. If the account earns 7% interest per year, what will be the balance in the account right after you make the second deposit? ... The balance in the account right after you make the second deposit will be $ (Round to the nearest dollar.)
Suppose you put $200 into a bank account at the annual interest rate of 7%. *Round your answer to the nearest dollar. How much money will this deposit be worth in one year?
Your goal is to have $12,500 in your bank account by the end of eight years. If the interest rate remains constant at 8% and you want to make annual identical deposits, how much will you need to deposit in your account at the end of each year to reach your goal? (Note: Round your answer for PMT to two decimal places.) $1,292.71 $1,175.19 $940.15 $822.63If your deposits were made at the beginning of each year rather than an at the end, by how much would the amount of your deposit change if you still wanted to reach your goal by the end of eight years? (Note: Round your answer for PMT to two decimal places.) $87.05 $82.70 $108.81 $65.29
Suppose $1,000 is deposited in a bank account today (time 0), followed by $1,000 deposits in years 2, 4, 6, and 8. At 6% annual interest, how much will the future equivalent be at the end of year 12?
A bank features a savings account that has an annual percentage rate of r=3.4% with interest compounded weekly. Alfonso deposits $11,500 into the account. The account balance can be modeled by the exponential formula S(t)=P(1+r/n)^nt, where S is the future value, P is the present value, rr is the annual percentage rate, nn is the number of times each year that the interest is compounded, and tt is the time in years. What values should be used for P, r, and n?P= , r= , n= How much money will Alfonso have in the account in 10 years?Answer = $ .Round answer to the nearest penny. What is the effective annual rate for the savings account?effective rate = %.Round answer to 3 decimal places.
Suppose you receive $190 at the end of each year for the next three years. a. If the interest rate is 7%, what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in (a)? c. Suppose you deposit the cash flows in a bank account that pays 7% interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)?
If you deposit some money into a bank account today, to the nearest year, how long will it take to triple your deposit if it earns 32% annually? note: calculate to the nearest decimal. For example, if the answer is 12.56 years, then input your answer as 12.6
You have a bank account that pays an annual interest rate of 6.9%. If you deposit $5,000 today and another $9,000 4 years from today, how much will you have in the account 7 years after you make the second deposit? Round your answer to the nearest penny Type your answer...
You open an account where you deposit $500 today. Further, you deposit $800 at the beginning of next year, withdraw $250 at the beginning of year two and deposit $450 at the beginning of year 3. The return for year 1 is 6%, for year 2 it is -8%, for year 3 it is 4.5% and for year 4 it is -2%. What is your dollar-weighted or money-weighted return (in percent) for the four-year period? Answer to two decimals. O -1.45 -6.95 -11.92
You are depositing $3,000 today in an account with an expected rate of return of 10%. If you deposit an additional $4,000 three years from today, and $4,200 four years from today, what will your account balance be ten years from today? Show your formula/calculation/explanation!
Suppose you receive $100 at the end of each year for the next 3 years. a) if the interest rate is 8%, what is the present value of the cash flows? b) what is the future value in 3 years of the present value you compute in a? c) suppose you deposit the cash flows in a bank account that pays 8% interest in a year. What is the balance in the account at the end of each of the nest 3 years (after your deposit is made)? How does the final bank balance compare with your answer in b?

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