Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition

1st Edition

ISBN: 9780134047430

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 7, Problem 7.5Q

Can an ordinary annuity table be used to determine the present value of a three-year investment that pays $100 in the first year, $150 in the second, and $200 in the last year of the contract? Explain.

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Chapter 7, Problem 7.4Q

Chapter 7, Problem 7.6Q

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Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

Suppose you have an investment account that earns an annual 9% interest rate, compounded monthly. It took $500 to open the account, so your opening balance is $500. You choose to make fixed monthly payments of $230 to the account each month. Complete the table below to track your savings growth. Months Amount in account (Principal) 9% Interest gained (Remember to divide by 12 for monthly interest) Monthly Payment 1 2 3 $500 $230 $230 $230 $230 + $230 $230 10 6 $230 $230 8 9 $230 $230 10 $230 11 $230 12 What is the total amount gained in interest over this first year of this investment plan?

Chapter 7 Solutions

Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition

Ch. 7 - Prob. 7.1Q Ch. 7 - Prob. 7.2Q Ch. 7 - If interest is compounded more than once a year,...Ch. 7 - Prob. 7.4Q Ch. 7 - Can an ordinary annuity table be used to determine...Ch. 7 - Prob. 7.6Q Ch. 7 - Is the present value of an ordinary annuity more...Ch. 7 - Prob. 7.8Q Ch. 7 - Simple Interest. Assume Shafer Corporation...Ch. 7 - Compound Interest. Assume Shafer Corporation...

Ch. 7 - Prob. 7.3BE Ch. 7 - Prob. 7.4BE Ch. 7 - Prob. 7.5BE Ch. 7 - Present Value of a Single Sum, Compound Interest....Ch. 7 - Future Value of a Single Sum, Compound Interest....Ch. 7 - Prob. 7.8BE Ch. 7 - Present Value of a Single Sum, Compounded Interest...Ch. 7 - Prob. 7.10BE Ch. 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. 7.17BE Ch. 7 - Ordinary Annuity, Annuity Due, Using Interest...Ch. 7 - Prob. 7.2E Ch. 7 - Prob. 7.3E Ch. 7 - Prob. 7.4E Ch. 7 - Prob. 7.5E Ch. 7 - Prob. 7.6E Ch. 7 - Prob. 7.7E Ch. 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. 7.13E Ch. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Prob. 7.15E Ch. 7 - Prob. 7.16E Ch. 7 - Future Value of an Annuity Due, Decision Making....Ch. 7 - Prob. 7.18E Ch. 7 - Prob. 7.19E Ch. 7 - Prob. 7.20E Ch. 7 - Prob. 7.21E Ch. 7 - Prob. 7.22E Ch. 7 - Prob. 7.1P Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Present Value, Present Value of an Annuity Due,...Ch. 7 - Prob. 7.4P Ch. 7 - Prob. 7.5P Ch. 7 - Prob. 7.6P Ch. 7 - Prob. 7.7P Ch. 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. 7.12P Ch. 7 - Prob. 7.13P Ch. 7 - Expected Cash Flows. Hiteck Electronics sells a...Ch. 7 - Prob. 7.15P

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Can an ordinary annuity table be used to determine the present value of a three-year investment that pays $100 in the first year, $150 in the second, and $200 in the last year of the contract? Explain.

Solution Summary: The author explains that an ordinary annuity table cannot be used to determine the present value of a three-year investment.

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Chapter 7 Solutions