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1. 12% annual rate, compounded annually 2. 6% annual rate, compounded semiannually 3. 10% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate % % % % No. of Periods

1. 12% annual rate, compounded annually 2. 6% annual rate, compounded semiannually 3. 10% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate % % % % No. of Periods

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that you must estimate what the future value will be two years from today using the future value of 1 table. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Which interest rate column and number-of-periods row do you use when working with the following rates? (Round percentage answers to 2 decimal places.) 1. 12% annual rate, compounded annually 2. 6% annual rate, compounded semiannually 3. 10% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate % % % % No. of Periods
Transcribed Image Text:Assume that you must estimate what the future value will be two years from today using the future value of 1 table. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Which interest rate column and number-of-periods row do you use when working with the following rates? (Round percentage answers to 2 decimal places.) 1. 12% annual rate, compounded annually 2. 6% annual rate, compounded semiannually 3. 10% annual rate, compounded quarterly 4. 12% annual rate, compounded monthly Interest Rate % % % % No. of Periods
TABLE B.2+ Future Value of 1 Periods 1% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40 2% 3% 4% 5% 6% Rate 7% 8% 9% 1.0000 1.0000 1.0000 1.0700 1.0800 1.0900 1.1449 1.1664 1.1881 1.2597 1.2950 1.4116 1.5386 1.6771 1.3108 1.3605 1.4026 1.4693 1.5007 1.5869 10% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0100 1.0200 1.0300 1.0400 1.0500 1.0600 1.0201 1.0404 1.0609 1.0816 1.1025 1.1236 1.0303 1.0612 1.0927 1.1249 1.1576 1.1910 1.2250 1.0406 1.0824 1.1255 1.1699 1.2155 1.2625 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4185 1.0615 1.1262 1.1941 1.2653 1.3401 1.5036 1.6058 1.7138 1.8280 1.5938 1.7182 1.8509 1.9926 1.9990 2.1719 2.1589 2.3674 2.3316 2.5804 2.5182 2.8127 2.4098 2.7196 3.0658 2.5785 2.9372 3.3417 2.7590 3.1722 1.0721 1.1487 1.2299 1.3159 1.4071 1.0829 1.1717 1.2668 1.3686 1.4775 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 1.9672 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 1.1268 1.2682 1.4258 1.6010 1.7959 2.0122 2.2522 1.1381 1.2936 1.4685 1.6651 1.8856 2.1329 1.1495 1.3195 1.5126 1.7317 1.9799 2.2609 1.1610 1.3459 1.5580 1.8009 2.0789 2.3966 1.6047 1.8730 2.1829 2.5404 2.9522 1.4002 1.6528 1.9479 2.2920 2.6928 3.1588 3.7000 4.3276 1.1961 1.4282 1.7024 2.0258 2.4066 2.8543 3.3799 3.9960 4.7171 1.2081 1.4568 1.7535 2.1068 2.5270 3.0256 3.6165 4.3157 5.1417 1.2202 1.4859 1.8061 2.1911 2.6533 3.2071 3.8697 4.6610 5.6044 1.2824 1.6406 2.0938 2.6658 3.3864 4.2919 5.4274 6.8485 8.6231 2.4273 3.2434 4.3219 5.7435 7.6123 10.0627 13.2677 2.8139 3.9461 5.5160 7.6861 10.6766 14.7853 20.4140 28.1024 52.7996 4.8010 7.0400 10.2857 14.9745 21.7245 31.4094 45.2593 93.0510 3.6425 3.4259 3.9703 4.5950 1.1726 1.3728 1.1843 1.3478 1.8114 17.4494 29.9599 1.4166 1.9999 1.4889 2.2080 3.2620 1.0000 1.1000 12% f= (1 + i)" 2.8531 3.1384 3.4523 1.0000 1.1200 1.2544 1.4049 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.2107 2.1436 2.4760 2.3579 2.7731 2.5937 3.1058 1.5735 1.7623 1.9738 3.4785 3.8960 4.3635 3.7975 4.8871 4.1772 5.4736 6.1304 6.8660 5.0545 5.5599 7.6900 6.1159 8.6128 6.7275 9.6463 10.8347 17.0001 15% 1.0000 1.1500 1.3225 1.5209 1.7490 2.0114 2.3131 2.6600 3.0590 3.5179 4.0456 4.6524 5.3503 6.1528 7.0757 8.1371 9.3576 10.7613 12.3755 14.2318 16.3665 32.9190 66.2118 133.1755 267.8635 *Used to compute the future value of a known present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n = 20 and i = 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 x 1.4859).
Transcribed Image Text:TABLE B.2+ Future Value of 1 Periods 1% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 25 30 35 40 2% 3% 4% 5% 6% Rate 7% 8% 9% 1.0000 1.0000 1.0000 1.0700 1.0800 1.0900 1.1449 1.1664 1.1881 1.2597 1.2950 1.4116 1.5386 1.6771 1.3108 1.3605 1.4026 1.4693 1.5007 1.5869 10% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0100 1.0200 1.0300 1.0400 1.0500 1.0600 1.0201 1.0404 1.0609 1.0816 1.1025 1.1236 1.0303 1.0612 1.0927 1.1249 1.1576 1.1910 1.2250 1.0406 1.0824 1.1255 1.1699 1.2155 1.2625 1.0510 1.1041 1.1593 1.2167 1.2763 1.3382 1.4185 1.0615 1.1262 1.1941 1.2653 1.3401 1.5036 1.6058 1.7138 1.8280 1.5938 1.7182 1.8509 1.9926 1.9990 2.1719 2.1589 2.3674 2.3316 2.5804 2.5182 2.8127 2.4098 2.7196 3.0658 2.5785 2.9372 3.3417 2.7590 3.1722 1.0721 1.1487 1.2299 1.3159 1.4071 1.0829 1.1717 1.2668 1.3686 1.4775 1.0937 1.1951 1.3048 1.4233 1.5513 1.6895 1.8385 1.1046 1.2190 1.3439 1.4802 1.6289 1.7908 1.9672 1.1157 1.2434 1.3842 1.5395 1.7103 1.8983 2.1049 1.1268 1.2682 1.4258 1.6010 1.7959 2.0122 2.2522 1.1381 1.2936 1.4685 1.6651 1.8856 2.1329 1.1495 1.3195 1.5126 1.7317 1.9799 2.2609 1.1610 1.3459 1.5580 1.8009 2.0789 2.3966 1.6047 1.8730 2.1829 2.5404 2.9522 1.4002 1.6528 1.9479 2.2920 2.6928 3.1588 3.7000 4.3276 1.1961 1.4282 1.7024 2.0258 2.4066 2.8543 3.3799 3.9960 4.7171 1.2081 1.4568 1.7535 2.1068 2.5270 3.0256 3.6165 4.3157 5.1417 1.2202 1.4859 1.8061 2.1911 2.6533 3.2071 3.8697 4.6610 5.6044 1.2824 1.6406 2.0938 2.6658 3.3864 4.2919 5.4274 6.8485 8.6231 2.4273 3.2434 4.3219 5.7435 7.6123 10.0627 13.2677 2.8139 3.9461 5.5160 7.6861 10.6766 14.7853 20.4140 28.1024 52.7996 4.8010 7.0400 10.2857 14.9745 21.7245 31.4094 45.2593 93.0510 3.6425 3.4259 3.9703 4.5950 1.1726 1.3728 1.1843 1.3478 1.8114 17.4494 29.9599 1.4166 1.9999 1.4889 2.2080 3.2620 1.0000 1.1000 12% f= (1 + i)" 2.8531 3.1384 3.4523 1.0000 1.1200 1.2544 1.4049 1.2100 1.3310 1.4641 1.6105 1.7716 1.9487 2.2107 2.1436 2.4760 2.3579 2.7731 2.5937 3.1058 1.5735 1.7623 1.9738 3.4785 3.8960 4.3635 3.7975 4.8871 4.1772 5.4736 6.1304 6.8660 5.0545 5.5599 7.6900 6.1159 8.6128 6.7275 9.6463 10.8347 17.0001 15% 1.0000 1.1500 1.3225 1.5209 1.7490 2.0114 2.3131 2.6600 3.0590 3.5179 4.0456 4.6524 5.3503 6.1528 7.0757 8.1371 9.3576 10.7613 12.3755 14.2318 16.3665 32.9190 66.2118 133.1755 267.8635 *Used to compute the future value of a known present amount. For example: What is the accumulated value of $3,000 invested today at 8% compounded quarterly for 5 years? Using the factors of n = 20 and i = 2% (20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ($3,000 x 1.4859).
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