a) $15,000 is invested in an account at time 0. At the end of 4 years, an additional $15,000 isivested into the same account. The account is expected to return 9% interest (compoundedannually).a) What is the value in the account at the end of 10 years?b) If the same two $15,000 deposits are made (at time 0 and end of year 4) into a differentaccount that earns a nominal annual interest rate of 8.4% compounded quarterly, in whichaccount should the money be deposited in order to earn more interest?

Investment at time 0 15000 investment at the end of 4 years 15000 Rate of Interest for 10 years…

a) $15,000 is invested in an account at time 0. At the end of 4 years, an additional $15,000 is ivested into the same account. The account is expected to return 9% interest (compounded annually). a) What is the value in the account at the end of 10 years? 2$

a) $15,000 is invested in an account at time 0. At the end of 4 years, an additional $15,000 is ivested into the same account. The account is expected to return 9% interest (compounded annually). a) What is the value in the account at the end of 10 years? 2$

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

See similar textbooks

Related questions

Q: Homework . Unanswered You and your partner have now found a home for $170,000 in Boone, IA. It…

A: Cost of new home = $170,000 Down payment = 20% Down payment in $ = Cost*Down payment ratio…

Q: A new office building was constructed 8 years ago by a consulting engineering firm. At that time…

A: Loan amount is P 5000,000 Interest rate is 10%

Q: Kirk, Klein & Co. requires $108,000 fifteen years from now to retire a debt. A sinking fund (a) What…

A: Loan: It is the amount due to the lender by the borrower and the borrower pays periodic payments to…

Q: payment on a house. If you can invest your money at 3.25% compounded month, what payment would have…

A: Future Value of Annuity: It is the future value of the present cash flow stream and is estimated by…

Q: Find the compound amount for the deposit and the amount of interest earned. $8800 at 4% compounded…

A: The compound amount can be calculated with the help of future value function

Q: ing information concerning a firm: Assets required for operation: $5,100,000 Revenues: $8,400,000…

A: There is impact of debt on the net income and due to the interest payment the net income decreases…

Q: answer ed is coming back incorrect please help

Q: e interest rate was 20% and

A: Income refers to the amount which a person should earn from selling goods and services or an amount…

Q: 4. How much money will accumulate that generates a cash flow of P1000 every year for the next 8…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: If Sherry borrows 4000 SAR now, 3000 Sar 7years from now, and 1500 SAR 8 years from now and earn at…

A: Amount borrowed in year 0 (B0) = 4000 SAR Amount borrowed in year 7 (B7) = 3000 SAR Amount borrowed…

Q: XYZ Company Ltd wants to invest Tk. 5 lacs in a new project. The duration of the project is 5 Years.…

A: Investment in new project = 500,000 Time period = 5 years Tax rate = 40% Cost of capital = 8%

Q: A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be…

A: Hai there! thank you for the question. Question has multiple sub parts. As per company guidelines…

Q: what is its equity beta?

A: Equity beta also termed as stock beta or levered beta refers to the tool or method used to determine…

Q: A $100 bond with 6% annual coupons that can be called on any coupon date10 years to 20 years from…

A: Callable bond A callable bond is a bond that can be called and retired at any time within the call…

Q: eligible for redemption before it is due to b

A: A callable bond, also known as a redeemable bond, allows the issuer to redeem it before the maturity…

Q: A cotton buyer will be making a purchase of 245,000 pounds of cotton on March 1. The buyer…

A: Futures are used for hedging the cash market so that if prices rises than some loss may be prevented…

Q: It is still three weeks until payday and you have run out of cash. You have just received an…

A: Here, Amount borrowed = $500 Fees = $19.99 Number of days = 21

Q: Question 18 Hamilton Company invested in a two-year project having an internal rate of return of…

A: Solution:- We know, Internal Rate of Return (IRR) is the rate of return the project is yielding ie.…

Q: Find the term of the following ordinary general annuity. State your answer in years and months (from…

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at…

Q: A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be…

A: Here, Note: We are solving Part d to g as mentioned in the question.

Q: Charlie Corporation is a chemical company. The company issued an outstanding bond with a P100,000…

A: Par value of bond (FV) = P100,000 Coupon rate = 8% Quarterly coupon amount (C) = 100,000*0.08/4 =…

Q: Question 21 Harana Corp. issues P3,000,000, 15%, 120-day commercial papers and pays 1.25% as…

A: Solution:- Net proceeds means the amount received in hand after meeting all the expenses.

Q: Three friends are offered the choice of $500 today or $1000 3 years from today. One chooses the…

A: Here the concept of ‘time value of money’ will be used. The concept of time value of money states…

Q: e Target's stock has an expected return of 22% and a volatility of 40%, Hershey's stock has an…

A: Return on portfolio and volatility of the portfolio depends on weights of different components of…

Q: If you deposit 500 pesos at the end of each year for 3 years into an annuity that pays 5% annual…

A: An annuity is a contract between you and an insurance company in which you pay a lump-sum payment or…

Q: The employee credit union at State University is planning the allocation of funds for the coming…

A: Given: Loan Annual return Automobile loans(A) 9% Furniture loans(F) 11% Other secured…

Q: Can someone help explains the graphs Below?

A: Cash is one of the important factor in the organization and it affects almost all the decisions. To…

Q: On December 31, 2021, Vaden Corporation had the following account balances related to credit sales…

A: Concept. Adjusting entry to be passed for adjusting and estimating bad debt expense is :- Bad debt…

Q: Which type of bond is likely to pay a coupon payment that is varying (i.e. it changes over time) ? O…

A: STRIPS means Separate Trading of registered interest and principal securities. These are debt…

Q: Please show the formula used. You have 100 pesos a month you can deposit into an account earning…

A: The number of the months required can be calculated with the help of NPER function of Excel.

Q: ve Php 100 a month you can deposit into an account earning 3.9% APR, compounded monthly. How long…

A: As there is more compounding the more is the interest rate and more is the accumulation of interest…

Q: 2. A Machine costs $30,000 to purchase . Salvage value of the machine after 5 years = $7000.…

A: Capital recovery cost refers to those equivalent annual cost of the company which is used to recover…

Q: Proper tax planning for capital gains often involves controlling the _____ of the gain. Choose the…

A: Tax planning Tax planning is the planning of financial situations to ensure that one has to be…

Q: Hyundai Motor Company is a large multinational automotive manufacturer based in Seoul, South Korea,…

A: The following information given in the question. 1. HYMTF stock sold at $39 on 21 August, 2015 2.…

Q: It is 2024 and Carpet Baggers Inc. is proposing to construct a new bagging plant in a country in…

A: The net present value is used as a measure of the profitability of a project by discounting future…

Q: When a low-price stock is replaced by a high-price stock in the Dow Jones index, the divisor will be…

A: Dow Jones index is a price -weigjhted index. Price weighted index is the average of current share…

Q: Which of these statements about banks is true: i) Banks cannot convert all deposits in the Reserves…

A: Commercial banks is defined as the financial institution, which accepts the deposits, and offers the…

Q: An analyst gathers the following data: · Expected rate of return on the market = 14% ·…

A: Stock may be underpriced or overpriced depending on the whether required rate is above or below the…

Q: ntify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be…

A: Loans are to be paid by equal periodic payments that carry payment of principal amount and payment…

Q: = the maximum yield rate the investor can earn?

A: Bond price refers to the present discounted value of the future cash stream which is generated by…

Q: Sierra Company is considering a long-term investment project called ZIP. ZIP will require an…

A: Solution:- We know, Internal Rate of Return (IRR) is the rate of return the project is yielding ie.…

Q: A $85,000 bond with a coupon rate of 7.50%, payable semi-annually, is redeemable in 11.5 years. What…

A: Purchase price of bonds will be present value of maturity value and present value of interest…

Q: Sugar Sweet (SS) Company produces and sells 7,000 specialty Treats per year at a selling price of…

A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…

Q: Hello! Why is the number of days for 2010 is 328? It started March 9, 2010.

A: In the exact simple interest we assume that there are 365 days in year and in ordinary simple…

Q: years from a retirement fund at 4% compounded semi-annually. Future Value Ordinary Simple 2)Suppose…

A: An annuity is a payment plan where there is an exchange of periodic fixed payments for a lump sum…

Q: What quarterly compounded nominal interest rate is earned on payments of $215 paid at the beginning…

A: An annuity is a payment plan where a fixed recurring amount is paid in return for a lump sum amount.…

Q: Amanda Chin purchased a home for $296,000; she put 20% down with a mortgage rate of 3.785% for 30…

A: A mortgage is a type of loan, especially on properties, where the collateral is the property itself.…

Q: 9. Suppose current exchange rate is 250 yen=1$ and interest rate is 6% in Japan and 7% in US.…

A: Forward rate = [Spot rate * (1 + domestic interest rate) ]/ (1 + foreign interest rate).

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: Here,

Q: ntegrated Visual Technologies is offering anyone who purchases a television an annual interest rate…

A: The act in which one person or entity provides funds to another person for defined term and agreed…

Question

a) $15,000 is invested in an account at time 0. At the end of 4 years, an additional $15,000 is
ivested into the same account. The account is expected to return 9% interest (compounded
annually).
a) What is the value in the account at the end of 10 years?
b) If the same two $15,000 deposits are made (at time 0 and end of year 4) into a different
account that earns a nominal annual interest rate of 8.4% compounded quarterly, in which
account should the money be deposited in order to earn more interest?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

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.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Suppose that you deposit $7000 in a savings account that pays 4% annual interest, with interest credited to the account at the end of each year. Assuming that no withdrawals are made, complete the following: a. Find the balance in the account after 5 years. b. Find the balance of the account after 9 years and 10 months.
b) If the same two $15,000 deposits are made (at time 0 and end of year 4) into a different account that earns a nominal annual interest rate of 8.4% compounded quarterly, in which account should the money be deposited in order to earn more interest?
Suppose that $10,000 is deposited into a saving account that earns 6% interest, compounded annually.a) Assuming that no additional deposits or withdrawals are made, use the appropriate compound interestfactors to determine how much the account will be worth:i) After 5 years;ii) After 20 years. b) Verify that your answers in part (a) are correct by constructing a table or spreadsheet that shows howthe initial deposit will grow each year over 20 years. At a minimum, your table or spreadsheet shouldinclude a row for each year and show: the amount of money in the savings account at the start of each year. the amount of interest earned each year; and the amount of money in the savings account at the end of each year, after interest is paid.Be sure to briefly explain how your table or spreadsheet verifies your results from part (a). c) Again assuming that no additional deposits or withdrawals are made, how many years will it take untilthere is at least $50,000 in the account?
Suppose that $4500 is invested in an account that pays 2% annually and is left for 4 years. 1) How much will be in the account if interest is compunded quarterly? 2) How much will be in the account if interest is compouded continuously?
Suppose that $850,000 is invested in a savings account paying 5.25% interest per year. (Round answers to nearest hundredths or two decimal places.) a) Find the amount in the account after 11 years if interest is compounded monthly. 1 b) Find the amount in the account after 11 years if interest at continuous compound interest. c) How much interest was earned from continuous compounding in the 11 years? d) How long will it take for the amount in the account to grow to $2,000,000 if interest is compounded quarterly?
An amount of $4,000 is deposited into an account for which the interest rate is 5% per annum. Calculate the amount in the account after 7 years, if the interest is compounded continuously. Give your answer in dollars, rounded correct to the nearest cent. (Enter the number only, do not type a $ sign.) $ ?
Suppose $1,200 is deposited into an account which has an annual percentage rate of 9.81% per year. Assume it remains in the account for 18 years and no additional money is added to the account other than interest. (a) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, of assuming interest is compounded annually. Do not round any values. You can enter arithmetic expressions (containing +, -, *, /, or ^) in any of these boxes. Number 1200 •( Number What is the value in year x = 18 of an investment of $1,200 dollars which pays 9.81% compounded annually? $ Number (Round to the nearest 0.01 dollars) (b) Complete the boxes below to write an expression for the amount (in dollars) at year x = 18, assuming interest is compounded weekly (52 times per year). Do not round any values. You can enter arithmetic expressions (containing +, –, *, /, or ^) in any of these boxes. Number 1200 ( Number What is the value in year x = 18 of an investment of $1,200…
6) $25,000 is deposited at t= 0 into an account earning 4% effective annual interest. At the end of each year, the interest earned in that year plus an additional $500 is withdrawn from this account and put into another account earning 2% effective annual interest. Find the accumulated value in the second account after 50 years (when the first account is completely depleted.) Also, fill in the following table (or, redraw the table on your solution sheet being handed in and fill it in). Year Amount in 1st account Amount deposited into 2nd account 0 2 3 ... B 49 50
Use the formula for continuous compounding to compute the balance in the account after 1, 5, and 20 years. Also, find the APY for the account A $15,000 deposit in an account with an APR of 2.5% The balance in the account after 1 year is approximately $ (Round to the nearest cent as needed)