Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 6, Problem 6.14Q
Compute the required annual payment in Question 6–13.
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6) What is the present value of the following payment series when the interest rate is 3%:
YR1 = $200
YR2 = $100
YR3 = $370
YR4 = $370
YR5 = $370
YR6 = $-300
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Computes for the uniform annual series that is equivalent to a given future
amount *
F/A
A/F
F/P
A/P
Complete each requirement on a separate worksheet.
Each requirement must have a user input section.
Makeup and enter your own numbers for the user inputs for each requirement.
Requirements:
1. Create a user input section for the user to input the annual effective interest rate and
number of periods per year. Calculate the annual nominal interest rate.
2.
The user can invest money at the end of each year. Create a user input section for the user
to input the amount that they will invest at the end of each year. Using an annual interest
rate of 9%, how much will the user have at the end of 7 years?
3. The user wants to save money to buy a new car 10 years from today. The new car will
cost $125,000. Create a user input section for the user to input the amount that they can
invest at the beginning of each year. What annual interest rate will they need to earn to
have enough cash to buy the car 10 years from today?
4. The user wants to save $60,000.00 for a once in a lifetime…
Chapter 6 Solutions
Intermediate Accounting
Ch. 6 - Prob. 6.1QCh. 6 - Explain compound interest.Ch. 6 - Prob. 6.3QCh. 6 - Prob. 6.4QCh. 6 - Prob. 6.5QCh. 6 - Prob. 6.6QCh. 6 - What is an annuity?Ch. 6 - Explain the difference between an ordinary annuity...Ch. 6 - Prob. 6.9QCh. 6 - Prepare a time diagram for the present value of a...
Ch. 6 - Prepare a time diagram for the present value of a...Ch. 6 - What is a deferred annuity?Ch. 6 - Assume that you borrowed 500 from a friend and...Ch. 6 - Compute the required annual payment in Question...Ch. 6 - Explain how the time value of money concept is...Ch. 6 - Prob. 6.1BECh. 6 - Prob. 6.2BECh. 6 - Prob. 6.3BECh. 6 - Present value; single amount LO63 John has an...Ch. 6 - Present value; solving for unknown; single amount ...Ch. 6 - Future value; ordinary annuity LO66 Leslie...Ch. 6 - Future value; annuity due LO66 Refer to the...Ch. 6 - Prob. 6.8BECh. 6 - Prob. 6.9BECh. 6 - Prob. 6.10BECh. 6 - Solve for unknown; annuity LO68 Kingsley Toyota...Ch. 6 - Price of a bond LO69 On December 31, 2018,...Ch. 6 - Lease payment LO69 On September 30, 2018,...Ch. 6 - Prob. 6.1ECh. 6 - Future value; single amounts LO62 Determine the...Ch. 6 - Prob. 6.3ECh. 6 - Prob. 6.4ECh. 6 - Prob. 6.5ECh. 6 - Solving for unknowns; single amounts LO64 For...Ch. 6 - Future value; annuities LO66 Wiseman Video plans...Ch. 6 - Prob. 6.8ECh. 6 - Solving for unknowns; annuities LO68 For each of...Ch. 6 - Prob. 6.10ECh. 6 - Prob. 6.11ECh. 6 - Deferred annuities LO67 Required: Calculate the...Ch. 6 - Prob. 6.13ECh. 6 - Prob. 6.14ECh. 6 - Solving for unknown annuity amount LO68 Required:...Ch. 6 - Prob. 6.16ECh. 6 - Price of a bond LO69 On September 30, 2018, the...Ch. 6 - Price of a bond; interest expense LO69 On June...Ch. 6 - Lease payments LO69 On June 30, 2018,...Ch. 6 - Lease payments; solve for unknown interest rate ...Ch. 6 - Prob. 6.21ECh. 6 - Analysis of alternatives LO63, LO67 Esquire...Ch. 6 - Prob. 6.2PCh. 6 - Analysis of alternatives LO63, LO67 Harding...Ch. 6 - Investment analysis LO63, LO67 John Wiggins is...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Deferred annuities LO67 On January 1, 2018, the...Ch. 6 - Prob. 6.9PCh. 6 - Noninterest-bearing note; annuity and lump-sum...Ch. 6 - Solving for unknown lease payment LO68, LO69...Ch. 6 - Solving for unknown lease payment; compounding...Ch. 6 - Lease v s. buy alternatives LO63, LO67, LO69...Ch. 6 - Prob. 6.14PCh. 6 - Prob. 6.15PCh. 6 - Prob. 6.1BYPCh. 6 - Prob. 6.2BYPCh. 6 - Prob. 6.3BYPCh. 6 - Prob. 6.4BYPCh. 6 - Judgment Case 65 Replacement decision LO63, LO67...Ch. 6 - Prob. 6.6BYPCh. 6 - Prob. 6.7BYP
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- Calculate the future value of the following annuities, assuming each annuity payment is made at the end of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) 1. 2. 3. Annuity Annual Payment Rate $4,700 6.0 % 8.0 % 7,700 6,700 10.0 % Show Transcribed Text 1. 2. 3. Annuity Annual Payment Rate Interest Compounded Quarterly Annually Semiannually $ 5,700 Interest Compounded 8.0 % Quarterly 10,700 11.0% Annually 4,700 10.0 % Semiannually Period Invested 5 years 6 years 9 years Calculate the present value of the following annuities, assuming each annuity payment is made at the end of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answers to 2 decimal places.) $ Period Invested 2 years 5 years 3 years Future Value of Annuity 172,892.28 Present Value of Annuityarrow_forwardKingbird Leasing Company agrees to lease equipment to Oriole Corporation on January 1, 2020. The following information relates to the lease agreement. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. The cost of the machinery is $514,000, and the fair value of the asset on January 1, 2020, is $677,000. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Oriole estimates that the expected residual value at the end of the lease term will be 55,000. Oriole amortizes all of its leased 1. 2. 3. equipment on a straight-line basis. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. The collectibility of the lease payments is probable. 4. 5. 6. Kingbird desires a 10% rate of return on its investments. Oriole's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown. (Assume the accounting period ends on…arrow_forwardComprehensive Part a. Reproduced in the following table are the first three lines from the 2% columns of each of several tables of mathematical values. For each of the following items, select from among these fragmentary tables the one from which the amount required can be obtained most directly (assuming that the complete table was available in each instance): 1. The amount to which a single sum would accumulate at compound interest by the end of a specified period (interest compounded annually) 2. The amount that must be deposited at the beginning of each of a specific number of years to provide for the accumulation, at annually compounded interest, of 1.02 3. The amount that must be deposited in a fund that will earn interest at a specified rate, compounded annually, in order to make possible the withdrawal of certain equal sums annually over a specified period starting 1 year from date of deposit 4. The amount of interest that will accumulate on a single deposit by the end of a specified period (interest compounded semiannually) 5. The amount that if paid now would settle a debt of larger amount due at a specified future date Part b. The following tables of values at 10% interest may be used as needed to answer the questions in this part of the problem. 1. Your client will make annual payments of 2,500 into a fund at the dose of each year. She has asked you how many 2,500 annual payments will be required to bring the fund to 22,500 assuming that the fund earns interest at 10% compounded annually. Compute the total number of full payments of 2,500 required and the amount of the final payment if it does not require the entire 2,500. Carefully label all computations supporting your answer. 2. Your client wishes to provide for the payment of an obligation of 200,000 due on July 1,2026. He plans to deposit 20,000 in a special fund each July 1 for 7 years starting July 1, 2020. He wishes to make an initial deposit on July 1, 2019, of an amount that, with its accumulated interest, will bring the fund up to 200,000 at the maturity of the obligation. He expects that the fund will earn interest at the rate of 10% compounded annually. Compute the amount to be deposited July 1, 2019. Carefully label all computations supporting your answer.arrow_forward
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