John Rider wants to accumulate $85,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2021. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) |
Answer each of the following independent questions. |
Required: | |
1. | If John were to deposit a single amount, how much would he have to invest on December 31, 2016? |
2. | If John were to make five equal deposits on each December 31, beginning on December 31, 2017, what is the required amount of each deposit? |
3. | If John were to make five equal deposits on each December 31, beginning on December 31, 2016, what is the required amount of each deposit? |
References
eBook & Resources
WorksheetLearning Objective: 06-04 Solve for either the interest rate or the number of compounding periods when present value and future value of a single amount are known.
Difficulty: 2 MediumLearning Objective: 06-08 Solve for unknown values in annuity situations involving present value.
John Rider wants to accumulate $85,000 to be used for hisdaughter’s college education. He would...
John Rider wants to accumulate $120,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2021. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were...
John Rider wants to accumulate $125,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: If John were to...
John Rider wants to accumulate $130,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2023. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were...
John Rider wants to accumulate $80,000 to be used for his daughter’s college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: If John were to...
John Rider wants to accumulate $95,000 to be used for his daughter's college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of SD) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions Required: 1. John were to...
John Rider wants to accumulate $60,000 to be used for his daughter's college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were...
John Rider wants to accumulate $130,000 to be used for his daughter's college education. He would like to have the amount available on December 31, 2026. Assume that the funds will accumulate in a certificate of deposit paying 8% interest compounded annually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of$1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Answer each of the following independent questions. Required: 1. If John were to...
1. For each of the following situations involving single amounts, solve for the unknown. Assume that interest is compounded annually. (i = interest rate, and n = number of years) (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) (Round your final answers to nearest whole dollar amount.) Present Value Future Value i n 1. $80,000 4.5% 9 2. $31,841 $94,000 16 3....
Cardinal Company is considering a project that would require a $2,810,000 investment in equipment with a useful life of five years. At the end of five years, the project would terminate and the equipment would be sold for its salvage value of $500,000. The company’s discount rate is 16%. The project would provide net operating income each year as follows: Sales $ 2,847,000 Variable expenses 1,121,000 Contribution margin 1,726,000 Fixed expenses: Advertising, salaries, and other fixed...
Betty DeRose wants to have $138,873 in five years. Betty intends to accumulate that amount by making equal quarterly cash deposits at the beginning of every three months for five years into a bank account that pays 20% interest compounded quarterly. Calculate the amount of each quarterly deposit. You will need to use the time value of money table factors.