Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 11, Problem 8EB
You put $600 in the bank for 3 years at 15%.
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 third year.
B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
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You plan to deposit $700 in a bank account now and $900 at the end of one year. If the account earns 2% interest per year, what will the balance be in the account right after you make the second deposit?
There will be $ in the account right after the second deposit.
(Type an integer or a decimal.)
Suppose you receive $100 at the end of each year for the next 3 years. a) if the interest rate is 8%, what is the present value of the cash flows? b) what is the future value in 3 years of the present value you compute in a? c) suppose you deposit the cash flows in a bank account that pays 8% interest in a year. What is the balance in the account at the end of each of the nest 3 years (after your deposit is made)? How does the final bank balance compare with your answer in b?
You put $250 in the bank for 5 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 the textbook to verify that your answer is correct. (https://cnx.org/contents/kg0cimBs@14.13:vq8rrTZQ@6/Time-Value-of-Money)
Chapter 11 Solutions
Principles of Accounting Volume 2
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