Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Question
Chapter A3, Problem 8CE
To determine
Concept introduction:
Time value of money:
Time value of money is the concept that differentiates the value of money received today and the value of same money received in future. According to this concept, the same amount of money to be received in future shall have lower present value (value of the money today) due to the interest that could be earned on that money.
To calculate:
The future value.
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Suppose a certain manufacturer deposits $3,000 at the beginning of each 3
month period for 6 years in an account paying 8% interest compounded
quarterly. (Round your answers to the nearest cent.)
(a) How much (in $) will be in the account at the end of the 6 year period?
(b) What is the total amount (in $) of interest earned in this account?
Complete the following table by using Table 15.1. (Do not round intermediate calculations. Round your answers to the nearest cent.):
Selling price: $237,000
Down payment: $47,400
Amount mortgage: ??
Rate: 6.00%
Years: 15
Monthly payment: ??
First payment broken down into-- Interest: ?? Principal: ??
Balance at end of month: ??
Complete the following amortization chart by using Table 15.1.
Note: Round your "Payment per $1,000" answer to 5 decimal places and other answers to the nearest cent.
Selling price of home: $198,000
Down payment: $60,000
Principal (loan): 138,000
Rate of interest: 6.5%
Years: 25
Payment per $1,000: ???
Monthly mortgage payment:????
TABLE 15.1
Amortization table (mortgage principal and interest per $1,000)
Rate
Interest Only
10 Year
15 Year
20 Year
25 Year
30 Year
40 Year
2.000
0.16667
9.20135
6.43509
5.05883
4.23854
3.69619
3.02826
2.125
0.17708
9.25743
6.49281
5.11825
4.29966
3.75902
3.09444
2.250
0.18750
9.31374
6.55085
5.17808
4.36131
3.82246
3.16142
2.375
0.19792
9.37026
6.60921
5.23834
4.42348
3.88653
3.22921
2.500
0.20833
9.42699
6.66789
5.29903
4.48617
3.95121
3.29778
2.625
0.21875
9.48394
6.72689
5.36014
4.54938
4.01651
3.36714
2.750
0.22917
9.54110
6.78622
5.42166
4.61311
4.08241
3.43728
2.875
0.23958
9.59848
6.84586
5.48361
4.67735
4.14892
3.50818
3.000…
Chapter A3 Solutions
Cornerstones of Financial Accounting
Ch. A3 - Prob. 1DQCh. A3 - Prob. 2DQCh. A3 - Prob. 3DQCh. A3 - Prob. 4DQCh. A3 - Prob. 5DQCh. A3 - Prob. 1CECh. A3 - Prob. 2CECh. A3 - Prob. 3CECh. A3 - Prob. 4CECh. A3 - Prob. 5CE
Ch. A3 - Use Future Value and Present Value Tables to Apply...Ch. A3 - Prob. 7CECh. A3 - Prob. 8CECh. A3 - Prob. 9CECh. A3 - Prob. 10CECh. A3 - Prob. 11ECh. A3 - Prob. 12ECh. A3 - Prob. 13ECh. A3 - Future Values and Long-Term Investments Portman...Ch. A3 - Prob. 15ECh. A3 - Prob. 16ECh. A3 - Prob. 17ECh. A3 - Present Values Phillips Enterprises signed notes...Ch. A3 - Present Values Krista Kellman has an opportunity...Ch. A3 - Prob. 20ECh. A3 - Prob. 21ECh. A3 - Future Value of a Single Cash Flow Jenkins...Ch. A3 - Prob. 23ECh. A3 - Installment Sale Baileys Billiards sold a pool...
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