Question

Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. (FV of S1, PV of $1, FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Determine how much will be accumulated in the fund on December 31, 2024, under each of the following situations. 1. The first $2,000 deposit is made on December 31, 2021, and interest is compounded annually. 2. The first $2.000 deposit is made on December 31, 2020, and interest is compounded annually. 3. The first $2.000 deposit is made on December 31, 2020, and interest is compounded quarterly. 4. The first $2,000 deposit is made on December 31, 2020, interest is compounded annually, and interest earned is withdrawn at the end of each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The first $2.000 deposit is made on December 31, 2021, and interest is compounded annually. (Round your final answers to nearest whole dollar amount.) Table or calculator function: Deposit: Fund balance 12/31/2024

Answer 1

soltion 0 The first deposit made on December 31,209) and interest is compounded annually FVA= $2.000 (4.4793) - $9,559 future value of an ordinary annuity of $1:0=4, i= 12% from EUAL $12) @ The first deposit is made on December 31,2020 and Interest is compounded annually FUAD = $2.000 (5.3528) = $ 10.406 (future value of an annuity due on $1 :n=4, i=12% (from FUAD af $17 6 The first deposit is made and interest is compounded on December 31,2017 Quarterly Quarterly interest rate = 12% 14=3% effective annual interest rate = 1 (1+0.03) 141 = 12.55% Future value $2,000 X Cumulative fv factar at 12.55% for a periods of annuity due =

= 8,000 X 5.42263 = $ 10.845 6 of Interest earned is withdrawn at the end of year then accumulated fund balance = $2.000 X4 = $8,000