Managerial Accounting: Tools For Business Decision Making, Seventh Edition Wileyplus Card
7th Edition
ISBN: 9781118680698
Author: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
Publisher: John Wiley & Sons Inc
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Question
Chapter A, Problem A.1BE
(a)
To determine
Calculate the accumulated amount withdrawn by J, if the investment earns simple interest.
(a)
Expert Solution
Answer to Problem A.1BE
The accumulated amount withdrawn by J is $9,600.
Explanation of Solution
Future value: This is the amount of present value accumulated or compounded at a rate of interest till a particular future date.
Formula to compute future value at simple interest:
Determine the accumulated amount withdrawn by J.
The justification for the above calculation is as follows:
J invested $6,000 at 5% interest rate for 12 years. He withdrew the accumulated amount of money after 12 years. In that, he earned the interest amount of $3,600 from the investment (using simple interest method). Therefore, the accumulated amount withdraw by J is $9,600.
Conclusion
Therefore, the accumulated amount withdrawn by J is $9,600.
(b)
To determine
Calculate the future value of a single amount, if the interest is compounded annually.
(b)
Expert Solution
Answer to Problem A.1BE
Therefore, the future value of an amount is $10.775.16.
Explanation of Solution
Future value: This is the amount of present value accumulated or compounded at a rate of interest till a particular future date.
Formula to compute future value at compounded interest:
Or,
Determine the accumulated amount withdrawn by J.
Note: Refer to Table 1 of Appendix A for future value factor.
J invested $6,000 at 5% interest rate for 12 years. If the interest amount is compounded annually, the future value factor of 5% for 12 time periods would be 1.79586. Therefore, the amount withdrawn by J is $10.775.16.
Conclusion
Therefore, the future value of an amount is $10.775.16.
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Chapter A Solutions
Managerial Accounting: Tools For Business Decision Making, Seventh Edition Wileyplus Card
Ch. A - Prob. A.1BECh. A - Kor each of the following cases, indicate (a) what...Ch. A - Liam Company signed a lease for an office building...Ch. A - Prob. A.4BECh. A - Prob. A.5BECh. A - Prob. A.6BECh. A - For each of the following cases, indicate (a) what...Ch. A - Prob. A.8BECh. A - Prob. A.9BECh. A - Prob. A.10BE
Ch. A - Prob. A.11BECh. A - Prob. A.12BECh. A - Dempsey Railroad Co. is about to issue 400,000 of...Ch. A - Prob. A.14BECh. A - Neymar Taco Company receives a 75,000, 6-year note...Ch. A - Prob. A.16BECh. A - Frazier Company issues a 10%, 5-year mortgage note...Ch. A - Prob. A.18BECh. A - Prob. A.19BECh. A - Prob. A.20BECh. A - Prob. A.21BECh. A - Prob. A.22BECh. A - Prob. A.23BECh. A - Prob. A.24BECh. A - Prob. A.25BECh. A - As the purchaser of a new house, Carrie Underwood...Ch. A - Using a financial calculator, solve for the...Ch. A - Using a financial calculator, provide a solution...
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