Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter M, Problem 2MC
To determine
Determine the amount of cash that would be available in the savings account 2 years from today.
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Question:
Use the following information to answer the next two questions:
You deposited the following stream of cash flow at the end of the year:
Year deposit rate of interest 1 5000 8%
4 4000 8.5%
6 7000 10%
What will be the total amount in your account at the end of 6 years?
2. What is the present value of your deposit?
You will deposit money into a bank account according to the following schedulet
today
year from today
$225,000
$53,500
years from today
years from today
$49,750
4
$21,200
years from today
$112,050
After 6 years from today, what will be the purchasing power of the money in your bank account, expressed in
today's dollars? Your bank pays interest at 2.5000% compounded yearly and inflation is expected to be 1.1250%
per year.
If $100 is deposited in a bank with an interest rate of 8%, and the same amount of money is taken out each year for other investments, what is the cash flow each year? $100 $108 $8 $92
Chapter M Solutions
Intermediate Accounting: Reporting And Analysis
Ch. M - Explain interest.Ch. M - Prob. 2GICh. M - Prob. 3GICh. M - Prob. 4GICh. M - Prob. 5GICh. M - Prob. 6GICh. M - Prob. 7GICh. M - Prob. 8GICh. M - Prob. 9GICh. M - Prob. 10GI
Ch. M - Prob. 11GICh. M - Prob. 12GICh. M - Prob. 13GICh. M - Prob. 14GICh. M - Prob. 15GICh. M - Prob. 16GICh. M - Prob. 17GICh. M - Prob. 18GICh. M - Prob. 19GICh. M - Prob. 20GICh. M - Prob. 21GICh. M - Prob. 22GICh. M - What is a deferred ordinary annuity? How does it...Ch. M - Prob. 24GICh. M - Prob. 25GICh. M - Give two examples of assets and three examples of...Ch. M - Prob. 1MCCh. M - Prob. 2MCCh. M - Refer to the present value table information on...Ch. M - Refer to the present value table information on...Ch. M - On May 1, 2019, a company purchased a new machine...Ch. M - An office equipment representative has a machine...Ch. M - Prob. 7MCCh. M - For which of the following transactions would the...Ch. M - On July 1, 2019, James Rago signed an agreement to...Ch. M - On January 1, 2019, Ken Company sold a machine to...Ch. M - Prob. 1RECh. M - Based on the following annual interest rates, what...Ch. M - Prob. 3RECh. M - Prob. 4RECh. M - Next Level Potter wishes to deposit a sum that at...Ch. M - Prob. 6RECh. M - Prob. 7RECh. M - Prob. 8RECh. M - Prob. 9RECh. M - If 90,000 is invested in a fund on December 31,...Ch. M - Samuel Ames owes 20,000 to a friend. He wants to...Ch. M - Prob. 12RECh. M - Prob. 13RECh. M - Prob. 14RECh. M - Prob. 1ECh. M - Future Value Hugh Colson deposited 20,000 in a...Ch. M - Prob. 3ECh. M - Future Value of Annuity Using appropriate tables,...Ch. M - Prob. 5ECh. M - Prob. 6ECh. M - Prob. 7ECh. M - Cash Flow Amounts R. Lee Rouse borrows 10,000 that...Ch. M - Prob. 9ECh. M - Amount of an Annuity John Goodheart wishes to...Ch. M - Prob. 11ECh. M - Prob. 12ECh. M - Present Value of Leased Asset On January 1, 2019,...Ch. M - Amount of an Annuity Beginning December 31, 2023,...Ch. M - Prob. 1PCh. M - Prob. 2PCh. M - Prob. 3PCh. M - Determining Loan Repayments Jerry Rockness needs...Ch. M - Prob. 5PCh. M - Prob. 6PCh. M - Value of an Annuity Using the appropriate tables,...Ch. M - Serial Installments; Amounts Applicable to...Ch. M - Prob. 9PCh. M - Comprehensive Part a. Reproduced in the following...Ch. M - Prob. 11PCh. M - Present Value of an Annuity John Joshua wants to...Ch. M - Present Value of an Annuity Ralph Benke wants to...Ch. M - Compound Interest Issues You are given the...Ch. M - Cash Flow Amounts On January 1, 2019, Philip...Ch. M - Prob. 16PCh. M - Comprehensive The following are three independent...Ch. M - Prob. 18PCh. M - Asset Purchase Price BWP Inc. is considering the...Ch. M - Prob. 1CCh. M - Prob. 2CCh. M - Prob. 3CCh. M - Prob. 4CCh. M - Prob. 5C
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- You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.arrow_forwardRefer to the present value table information on the previous page. If Kathleen put 3,000 in a savings account today, what amount of cash will be available 2 years from today? a. 3,000 0.857 b. 3,000 0.857 2 3,000 c. 4,000 0.681 0926 d. cannot be determined from the information givenarrow_forward12. You put $250 in the bank for 5 years at 12%. Using the Future Value of 1 Table, what factor would you use to calculate the future value of your deposit? Enter the factor as seen in the table, with five decimal places. 13. You put $8,195 in the bank for 6 years at 7%. Using the Future Value of 1 Table (Time and Value Table), what factor would you use to calculate the future value of your deposit? Round to four decimal places.arrow_forward
- Table 1 shows deposit into saving account with rate of return 10% per year. Determine the future value at year 20. Table 1: Deposit Money into Saving Account Information Year 1 2 2,000 3 5 6. Deposit, RM per year 800 2,000 2,000 1,800 1,600 1,400arrow_forwardUsing ume value of money tables, calculate the following. (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C., Exhibit 1-D) Note: Use approprlate factor(s) from the tables provided. a. The future value of $490 six years from now at 5 percent. b. The future value of $600 saved each year for 10 years at 7 percent c. The amount a person would have to deposit today (present value) at an interest rate of 7 percent to have $900 five years from now. d. The amount a person would have to deposit today to be able to take out $600 a year for 10 years from an account earning 9 percent. Complete this question by entering your answers in the tabs below. The future value of $600 saved each year for 10 years at? percent. Noter Round time value factor to 3 decimal place and finafapswes to 2 decimal places.arrow_forwardYou will deposit money into a bank account according to the following schedule: today $425,000 1 year from today $55,000 11 years from today $56,500 17 years from today $22,000 $124,300 19 years from today After 19 years from today, what will be the purchasing power of the money in your bank account, expressed in today's dollars? Your bank pays interest at 4.0000% compounded yearly and inflation is expected to be 3.5000% per year.arrow_forward
- Time Value of Money Concept The following situations involve the application of the time value of money concept. Use the full factor when calculating your results. Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 1. Janelle Carter deposited $9,960 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.$fill in the blank 1 2. Mike Smith deposited $22,360 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $69,447. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent.fill in the blank 2 % 3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 12% compounded annually. On January 1, 2017, the deposit has accumulated to $14,200. How much money did Lee…arrow_forwardfind the equivalent value of this cash flow at year 5 where i=5% NOTE: if you need to calculate the interest rate, always take the first 4 digits (0.xxxx) $200 Equivalent value? $500 3 9. 10 $300 а. 960 b. 945 c. 951 d. 955 e. 949 2.arrow_forwardIf you were to put $1,000 in the bank each year for the next 10 years at 6% interest, which table would you use to find the ending balance in your account? Group of answer choices Future value of $1 Present value of an annuity of $1 Future value of an annuity of $1 Present value of $1arrow_forward
- K Calculate the present value of the following future cash flows, rounding all calculations to the nearest dollar (Click the icon to view Present Value of $1 table) (Click the icon to view Present Value of Ordinary Annuity of $1 table) $12,000 received in five years with interest of 7% $12,000 received in each of the following five years with interest of 7% Payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9% 11. 12. 13. 11. Calculate the present value of $12,000 received in five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value X X Year 3 Year 4 Year 5 Total 12. Calculate the present value of $12,000 received in each of the following five years with interest of 7% (Enter any factor amounts to three decimal places, X.XXX.) Present value of an annuity X 13. Calculate the present value for payments of $7,000, $8,000, and $5,500 received in years 3, 4 and 5, respectively, with interest of 9%…arrow_forwardK Suppose you receive $500 at the end of each year for the next three years. a. If the interest rate is 7%, what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in (a)? c. Suppose you deposit the cash flows in a bank account that pays 7% interest per year. What is the balance in the account at the end of each of the next three years (after your deposit is made)? How does the final bank balance compare with your answer in (b)? a. The present value of the cash flow is $ (Round to the nearest cent)arrow_forwardYou have been depositing money into an account yearly based on the following investment amounts, rates and times, what is the value of that investment account at the end of that period? (Click here to see present value and future value tables) Amounts ofInvestment Rate Times Value at the Endof the Period $9,000 20% 16 years $fill in the blank 1 $13,000 15% 11 years $fill in the blank 2 $16,000 12% 6 years $fill in the blank 3 $35,000 10% 4 years $fill in the blank 4arrow_forward
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