PV and FV of $1
Mordica Company will receive $400,000 in 7 years. If the appropriate interest rate is 10%, the present value of the $400,000 receipt is
a. $204,000.
b. $205,264.
c. $604,000.
d. $779,488.
b. $205,264.
Barkley Company will receive $800,000 in a future year. If the future receipt is discounted at an interest rate of 8%, its present value is $504,136. In how many years will the $800,000 be received?
a. 5 years
b. 6 years
c. 7 years
d. 8 years
b. 6 years
A series of equal periodic payments in which the first payment is made on the beginning date of the contract is called this type of annuity...
an annuity due
The Johannsens know they will be needing to replace the roof on their home soon. If the estimated cost to replace the roof is $25,000 and they can save $3,600 at the end of each year, how long will it take them to save up enough to replace the roof assuming they can earn 6% on their savings?
a. 5 years
b. 2 years
c. 8 years
d. 6 years
d. 6 years
What is the pessimistic accountant's outlook on the world?
it's accrual
Nate is planning to invest his $5,000 graduation gift from his parents. The account he is looking at earns a 10% annual return with interest compounding quarterly. What amount will Nate have in the account after 5 years?
a. $8,052.55.
b. $6,444.50.
c. $7,500.00.
d. $8,193.10.
d. $8,193.10.
Dunston Company will receive $500,000 in a future year. If the future receipt is discounted at an interest rate of 10%, its present value is $256,580. In how many years is the $500,000 received?
a. 5 years
b. 6 years
c. 7 years
d. 8 years
c. 7 years
Lucy and Fred want to begin saving for their child's college education. They estimate that they will need $200,000 in eighteen years. If they can earn 6% per year, how much must be deposited at the beginning of each of the next eighteen years to fund the education?
a. $6,470
b. $6,105
c. $11,110
d. $5,924
b. $6,105
PV = $242,980
PMT = $75,000
n = 4
What is the interest rate?
9%
Why are accounting departments the most welcoming?
Because they know everyone counts.
Jamaal wants to have $5,0080,000 when he retires in 30 years. Assuming he can earn a 10% annual return, what does he need to invest today?
$286,550.
An uncle asks to borrow $1,000 today and promises to repay you $1,300 two years from now. What annual interest rate would you be agreeing to?
14%
Lucy and Fred want to begin saving for their child's college education. They estimate that they will need $120,000 in eighteen years. If they can earn 5% per annum, how much must be deposited at the end of each of the next eighteen years to fund the education?
$4,266
Spencer Corporation will invest $25,000 every December 31 for the next six years (2025 – 2030). If Spencer earns 12% on the investment, what amount will be in the investment fund on December 31, 2030?
$202,880
How Do Ants Find Their Way Back To Their Nests?
By ACCOUNTING their steps
Altman Company invests $900,000 today. The investment will earn 6% for 5 years, with no funds withdrawn. In five years, the amount in the investment fund is...
$1,204,407.
PV = $44,421
FV = $80,000
n = 15
What is the annual interest rate?
4%
Garretson Corporation will receive $15,000 today (January 1, 2025), and also on January 1 for the next five years (2026 – 2030). What is the present value of the six $15,000 receipts, assuming a 12% interest rate?
$69,072
Sonata Corporation will receive $40,000 on January 1, 2025 and each January 1 for the next five years (2026 – 2030). What is the present value of the six $40,000 receipts, assuming a 12% interest rate?
$184,191
How does Santa’s accountant value his sleigh?
The Net PRESENT value