INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
3rd Edition
ISBN: 9780137391707
Author: GORDON
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 7, Problem 7.12BE
Future Value of an Ordinary Annuity. An undergraduate student decides to make $5,000 deposits in a fund each year over the next four years to accumulate enough money to pay for a master’s program. The fund will earn 10% annual interest compounded annually. If the first payment occurs at year-end, what amount will be in the fund after four years? Draw a timeline to illustrate the problem.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Say that you want to establish a scholarship fund that will make fixed payments forever. To fund the
scholarship, you plan to make 12 annual contributions of $9.9k to an investment account with an expected
return of 6.0% interest annually. Your first contribution occurs today. If the scholarship fund makes its first
payment two years following the last contribution, then what is the fixed annual payment that the
scholarship fund will award? (Round to the nearest dollar)
Computing the Future Value of an Annuity
Stone will deposit $8,250 at the beginning of each year for 10 years in a fund that earns 5%, compounded annually. What is the total amount of the fund at the end of 10 years?
Round your answer to the nearest whole number.
Do not use a negative sign with your answer.
$ Answer
you want to establish an annuity that will pay $7,500 for the next twenty years (end year) your financial institution will establish such an annuity if you deposit $104,000 today. what is the implied rate that the institution is paying on this annuity?
Chapter 7 Solutions
INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - If interest is compounded more than once a year,...Ch. 7 - Prob. 7.4QCh. 7 - Can an ordinary annuity table be used to determine...Ch. 7 - Prob. 7.6QCh. 7 - Is the present value of an ordinary annuity more...Ch. 7 - Prob. 7.8QCh. 7 - Simple Interest. Assume Shafer Corporation...Ch. 7 - Compound Interest. Assume Shafer Corporation...
Ch. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Prob. 7.5BECh. 7 - Present Value of a Single Sum, Compound Interest....Ch. 7 - Future Value of a Single Sum, Compound Interest....Ch. 7 - Prob. 7.8BECh. 7 - Present Value of a Single Sum, Compounded Interest...Ch. 7 - Prob. 7.10BECh. 7 - Present Value of a Single Sum, Calculating Time...Ch. 7 - Future Value of an Ordinary Annuity. An...Ch. 7 - Future Value of an Annuity Due. Mariah Carey...Ch. 7 - Future Value of an Ordinary Annuity: Calculating...Ch. 7 - Present Value of an Ordinary Annuity. CB...Ch. 7 - Present Value of an Annuity Due, Semiannual...Ch. 7 - Prob. 7.17BECh. 7 - Ordinary Annuity, Annuity Due, Using Interest...Ch. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Future Value of an Ordinary Annuity, Future Value...Ch. 7 - Single Sum, Solving for Other Variables. Two...Ch. 7 - Ordinary Annuity, Solve for Interest Rate,...Ch. 7 - Present Value, Note Payable Prices. Wiz Khalifa...Ch. 7 - Future Value of a Deterred Annuity. Lenny Shafer...Ch. 7 - Prob. 7.13ECh. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Future Value of an Annuity Due, Decision Making....Ch. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.1PCh. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Present Value, Present Value of an Annuity Due,...Ch. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Present Value of an Annuity Due, Deferred...Ch. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Future Value of an Ordinary Annuity, Deferred...Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Prob. 7.12PCh. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15P
Additional Business Textbook Solutions
Find more solutions based on key concepts
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
Intermediate Accounting
How would the decision to dispose of a segment of operations using a split-off rather than a spin-off impact th...
Advanced Financial Accounting
The managers of an organization are responsible for performing several broad functions. They are ______________...
Principles of Accounting Volume 2
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals Of Cost Accounting (6th Edition)
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals of Cost Accounting
Interest-bearing notes payable with year-end adjustments P1 Keesha Co. borrows $200,000 cash on November 1, 201...
Financial Accounting: Information for Decisions
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuityarrow_forwardFind the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $50,000 in a fund paying 5% per year, with monthly payments for 5 years, if the fund contains $10,000 at the start PMT = $ Need Help? Read It Watch Itarrow_forwardA student needs $6000 every six months to pay living expenses while at college. It will take him 8 years to complete his degree. Find the (a) lump sum that must be deposited to meet this need and (b) the interest earned assuming 5% per year, compounded semiannually. Click here to view Rage 1.of the present value of an annuity table. Click here to view Rage 2 of the present value of an annuity.table. (a) The lump sum is approximately $. (Round to the nearest cent as needed.)arrow_forward
- Use the savings plan formula to answer the following question:. Suppose you find a fund that offers an APR of 5%. How much should you deposit monthly to accumulate $82000 in 17 years?arrow_forwardFind the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $30,000 in a fund paying 5% per year, with monthly payments for 5 years, if the fund contains $10,000 at the start PMT = $ please round it to the nearest centarrow_forwardprovide answerarrow_forward
- a) You deposit $200 monthly into an annuity with the goal of accumulating $180,000 after 30 years. What annual rate, compounded monthly, is required to ?accomplish this b) At retirement, a client has two payment options: a 20-year annuity at $50,000 per year starting after 1 year or a lump sum of $500,000 today. If the client's required rate of return on retirement fund investments is 6% per year, which plan has the higher present ?value and by how mucharrow_forward(Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in thischapter, you have decided to invest $4,700 at the end of each year into a Roth IRA for the next 40 years. If you earn 8 percent compounded annually on your investment, how much will you have when you retire in 40 years? How much will you have if you wait 10 years before beginning to save and only make 30 payments into your retirement account?arrow_forwardPresent Value. You want to begin a college fund for your new born child; you hope to accumulate $500,000 within 18 years from now. If a current investment opportunity yields 11 % annually, how much must you invest in a lump sum (or one-time payment) in order to reach the $500,000 when needed?arrow_forward
- Find the periodic payments PMT necessary to accumulate the given amount in an annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $50,000 in a fund paying 3% per year, with quarterly payments for 20 years PMT= $ _______ ??arrow_forwardA trust notifies you that you are entitled a grant that would give you annual payments of $6,200 per year for ten years. The first payment will be made to you one year later (at the end of first year). The annual interest rate is 10% (APR). What is the present value of the grant?arrow_forwardWrite your answer on clean paper, show your solution clearly and readable, and then Box your final answer. Take note: Give what is asked and show your answer.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
5 Steps to Setting Achievable Financial Goals | Brian Tracy; Author: Brian Tracy;https://www.youtube.com/watch?v=aXDuLxEJqBo;License: Standard Youtube License