The Bello Corporation wishes1 poto accumulate P2,000,000 forplant expansion. The funds arerequired on January 1, 2011.Bello intends to make five equalannual deposits in a fund thatwill earn interest at 7%compounded annually. The firstdeposit is made on January 1,2006. Present value and futurevalue facts are as follows:Present value of $1 at7% for 5 periodsPresent value of an ordinary annuityof 1 at 7% for 5 periodsFuture value of an ordinary annuityof 1 at 7% for 5 periodsFuture value of an annuity dueof 1 at 7% for 5 periodsWhat is the amount of the required annualdeposit?.7134.105.756.15

Here we have been give the following information Funds required at the end of January…

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What is the amount of the required annual deposit?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 10RE: If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32...

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Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

The Bello Corporation wishes
1 po
to accumulate P2,000,000 for
plant expansion. The funds are
required on January 1, 2011.
Bello intends to make five equal
annual deposits in a fund that
will earn interest at 7%
compounded annually. The first
deposit is made on January 1,
2006. Present value and future
value facts are as follows:
Present value of $1 at
7% for 5 periods
Present value of an ordinary annuity
of 1 at 7% for 5 periods
Future value of an ordinary annuity
of 1 at 7% for 5 periods
Future value of an annuity due
of 1 at 7% for 5 periods
What is the amount of the required annual
deposit?
.713
4.10
5.75
6.15

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