Find the future value of a deposit of $15000 at 6% interest compounded monthly for 11 years.On September 8, Peter Pun started an annuity. He arranged to have $85 deducted from his end-of-month paychecks. The money would earn 7% interest compounded monthly. (a) Find thefuture value of the account on December 1 using an Amortization Formula. (hint: there arethree payments/periods; September, October and November)

As per the guidelines if multiple questions are asked at once, then the solution for the first…

Answered: Find the future value of a deposit of…

Business

Finance

Find the future value of a deposit of $15000 at 6% interest compounded monthly for 11 years.

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 5RE: Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit...

See similar textbooks

Related questions

Q: Suppose your firm is considering investing in a project with the cash flows shown below, that the…

A: Payback Period:It is the period in which the project of the company recovers the cash outflow (cost…

Q: Find the value of the perpetuity on January 1 2010.

A: The cash flows from the perpetuity back to the target date must be discounted in order to determine…

Q: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $775 per set and…

A: Cost of capital = 9%Tax rate = 21%Cost of equipment = $37,400,000Net working capital =…

Q: Consider a borrowing of $400,000, with monthly payments to be made over 15 years with a 15% add-on…

A: Borrowing = $400,000Number of years for which monthly payments are to be made = 15 yearsAdd- on…

Q: Draiman Corporation has bonds on the market with 16.5 years to maturity, a YTM of 10.6 percent, a…

A: Price of bond is the present value of coupon payments plus present value of par value of the bond…

Q: You've observed the following returns on Pine Computer's stock over the past five years: -27…

A: The problem case wants to calculate the arithmetic average of the annual returns for 5 years. Based…

Q: Attempts 1 1 Keep the Highest 1/3 5. Problem 7.09 (Yield to Maturity) eBook Harrimon Industries…

A: The objective of the question is to calculate the yield to maturity (YTM) of a bond at different…

Q: If Caspian Sea Drinks uses a 8.00% discount rate, then the net present value of the RGM-7000…

A: Net present value(NPV) is the difference between present value(PV) of all cash inflows and initial…

Q: Beene Distributing is considering a project that will return $215,000 annually at the end of each…

A: To find out how much Beene Distributing is willing to pay for the project, we need to calculate the…

Q: OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock…

A: The WACC is the weighted average cost of capital.It is the minimum rate of return to be earned by…

Q: Dynamic Systems has an outstanding bond that has a $ 1,000 par value and a 10 percent coupon rate.…

A: Current yield is basically the total amount of annual coupon of the bond divided by the current…

Q: An analyst gathered the following information for a stock and market parameters: stock beta = 1.42;…

A: The Capital Asset Pricing Model (CAPM), which takes into account ongoing testing and research, is a…

Q: Suppose that you purchased a call option on the S&P 100 Index. The option has an exercise price of…

A: The option contract is a type of derivative contract which provides you with the right to purchase…

Q: Question # 3: David is buying a house for $256,000. To obtain the mortgage, David is required to…

A: The objective of this question is to calculate the down payment, mortgage amount, monthly payment,…

Q: Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return…

A: Treasury Bonds: Treasury bonds, issued by the U.S. Department of the Treasury, are long-term debt…

Q: 5. The Cost of Equity and Flotation Costs Messman Manufacturing will issue common stock to the…

A: Issue price = $25Expected dividend = $2.00Growth rate = 4%Floatation cost = 8%

Q: Stock A's stock has a beta of 1.30, and its required return is 10.25%. Stock B's beta is 0.80. If…

A: The required rate of return represents the minimum expected return sought by investors. The required…

Q: Compute the NPV statistic for Project U if the appropriate cost of capital is 11 percent. (Negative…

A: NPV is a financial measure utilized to evaluate investment profitability, contrasting the present…

Q: Leila wants to buy a Corvette for $84,300 and the dealership has quoted an APR of 7.1%, compounded…

A: The objective of the question is to calculate the total amount that Leila will pay over the life of…

Q: Cookie Dough Corporation has two different bonds currently outstanding. Bond M has a face value of…

A: Bonds are the financial instruments issued by governments, municipalities, corporations, and other…

Q: Present value of bonds payable; premium Moss Co. issued $850,000 of four-year, 13% bonds, with…

Q: Hasbro, Incorporated, sells toys and games in over 120 countries, including popular brands such as…

A: A sustainable growth rate is the growth achieved using internal funds. The following formula is used…

Q: Annual Deposit Rate of Number of Return Years $ 3,000 8% 7 $ 3,000 12 % 7 $ 3,000 8% 14 $ 3,000 12 %…

A: Given Data: Annual DepositRate of ReturnNo of years30008%7300012%730008%14300012%14

Q: Compute the NPV statistic for Project U if the appropriate cost of capital is 11 percent. (Negative…

A: NPV, a key tool in investment evaluation, calculates the disparity between the present value of an…

Q: Blossom Ltd., which uses ASPE, recently expanded its operations into an adjoining municipality, and…

Q: Rework Table 7.4 for horizon years 1, 2, 3, and 10, assuming that investors expect the dividend and…

A: Present value refers to the current value of an asset that will be present at some future date…

Q: QUESTION 2 It is March 9, 2017. The price of a Treasury bond with a 10% coupon that matures on…

A: Interest rate= 10%Quoted at = 102-11Cash price = ?

Q: Consider the following information: State of Economy Probability of State of Economy Rate of Return…

A: Portfolio variance assesses the dispersion of returns across stocks held within a portfolio,…

Q: If the inflation rate is 6% per year and you want to earn a real return of 10% per year, how many…

A: To calculate the future value we will use the below formulaFuture value = P*(1+r)n*(1+i)nWhereP -…

Q: You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that…

A: Free cash flow is a financial measure that shows the amount of cash a company generates after…

Q: You are to receive $16 700 from your trust fund in 7.5 years. You negotiate a deal where you can…

A: Future value refers to the value of current asset at some future date affected by interest and…

Q: Meadow Dew Corporation currently has an EPS of $4.00, and the benchmark PE for the company is 39.…

A: Current Earnings per share (EPS) = $4.00PE ratio = 39Growth rate in Earnings = 5%

Q: why we o or do not want to create a histogram for each variable

A: The objective of the question is to understand the reasons for creating or not creating a histogram…

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: NPV, a financial measure, evaluates investment profitability by comparing present cash inflows and…

Q: Determine the nominal annual rate of interest of the following ordinary general annuity. Conversion…

A: Nominal rate of interest refers to the percentage of return before the inflation effect or…

Q: In 2020, Caterpillar Incorporated had about 540 million shares outstanding. Their book value was…

A: (a) Therefore, the Caterpillar's book debt-to-value ratio= 0.58 ( Round to two decimal places).…

Q: All techniques Rieger International is evaluating the feasibility of investing $87,000 in a piece of…

A: Here,Cost of Capital is 8%Cash Flows are as follows: YearCash Flows0 $(87,000.00)1 $ 25,000.002 $…

Q: Blue Moose Home Builders Inc. has 9% annual coupon bonds that are callable and have 18 years left…

Q: Required: a. Find the duration of a 6% coupon bond making annual coupon payments if it has three…

A: Bonds are a type of financial instruments issued to provide loans to investors. They are issued for…

Q: Please assume an annuity due of $100,000 a year for 10 years. Assuming a discount rate of 6%,…

A: The objective of this question is to calculate the present value of an annuity due. An annuity due…

Q: Tanaka Machine Shop is considering a four-year project to improve its production efficiency. Buying…

A: Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the…

Q: Portfolio risk and return el holds a $10,000 portfolio that consists of four stocks. Her investment…

A: Market risk is measured through beta. A beta of 1 indicates that the stock is as volatile as the…

Q: 14% (nominal). The expected rate of inflation is 5%. The plant can be depreciated straight-line over…

A: The net present value analysis compares the current cost of an investment against its expected…

Q: Best Feeds, Inc. has the following information on their income statement: Sales…

A: The objective of the question is to calculate the Net Operating Profit After Taxes (NOPAT) for Best…

Q: Do not provide solution in imge format. and also do not provide plagarised content otherwise i…

A: The objective of this question is to calculate the change in the firm's Earnings Per Share (EPS)…

Q: The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no…

A: The objective of the question is to calculate the book value per share for Koski Inc. The book value…

Q: Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual payments, the…

A: The objective of the question is to calculate the value of a semiannual coupon bond given the par…

Q: Everest Inc's preferred stock pays a dividend of $1.70 per quarter, and it sells the preferred stock…

A: Effective annual rate of dividend is 23.68%Explanation:Everest incs preferred stock price is…

Q: Your uncle has $400,000 invested at 7.5%, and he now wants to retire. He wants to withdraw $35,000…

A: The time value of money is the concept that a dollar today is worth more than a dollar in the…

Q: Assuming that risk-free rates for 15 months are 3.6%, what is the value of an FRA where the holder…

A: To determine the interest payment for the three-month period in the Forward Rate Agreement (FRA), we…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Find the future value of a deposit of $15000 at 6% interest compounded monthly for 11 years.
On September 8, Peter Pun started an annuity. He arranged to have $85 deducted from his end-
of-month paychecks. The money would earn 7% interest compounded monthly. (a) Find the
future value of the account on December 1 using an Amortization Formula. (hint: there are
three payments/periods; September, October and November)

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: Definition of time value of money

VIEW

Step 2: Computation of the future value of deposit

VIEW

Solution

VIEW

Step by step

Solved in 3 steps with 2 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

Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
On September 8, Bert Sarkis started an annuity. He arranged to have $60 deducted from his end-of-month paychecks. The money would earn 7% interest compounded monthly. (a) Find the future value of the account on December 1 using an Amortization Formula. (Round your answer to the nearest cent.) $ 10280 X (b) Find the future value of the account on December 1 by applying the Compound Interest Formula to each payment individually. (Round your answer to the nearest cent.) 5.75 X (c) Find Bert's total contribution to the account. $ 2356.176 x (d) Find the total interest. (Round your answer to the nearest cent.) $ 7923.824 X
Use the appropriate formula located on Illustration 10-1 on page 209 to solve the problem. Bob deposits $5000 at the end of each 6 months for 14 years in an account paying 6% interest compounded semiannually A) Find the amount he will have on deposit at maturity. B) How much interest did Bob earn? Hint: Find the total amount that was deposited by multiplying the total number deposits with amount of each deposit and then subtracting this from the future value. Show the use of the appropriate formulas for each part by indicating the evaluation of the formula with information and provide the answers. Be sure to parts using the provided letters and organize your work neatly.
Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest ten dollars.) $500 deposited monthly for 14 years at 4% per year
Find the deposit at the end of month needed for 14 years to provide for a perpetuity of $9900 monthly. The 1st perpetuity payment is made at the end 19 month after the last deposit, and interest changes from iz = 17.46 % to iz65 = 9.08 % on that date. Answer: 1610.13
Find the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $500 is deposited monthly for 10 years at 4% per year in an account containing $5,000 at the start
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate Time Financial Goal $? at the end of each month 6.25% compounded monthly 45 years $1,000,000 a.The periodic deposit is $______. (Do not round until the final answer. Then round up to the nearest dollar asneeded.)
a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate Time Financial Goal $? at the end of each year 3% compounded annually 18 years $140,000 a.The periodic deposit is $_______. (Do not round until the final answer. Then round up to the nearest dollar asneeded.)
ind the amount accumulated FV in the given annuity account. (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $200 is deposited monthly for 10 years at 6% per year in an account containing $9,000 at the start
Louis is saving for his retirement by making annual end of year deposits for 30 years into a bank account that pays interest at a nominal rate of 8% compounded quarterly. For the first 10 years the deposits are level at $5000 each year. After the 10 th year, each deposit is 3% more than the year before. A) Give an actuarial expression for the account balance after the final deposit is made ? B) What is the account balance after the final deposit is made ?
A person is planning to deposit RO 1000 in a bank at the end of first year. Thereafter, he wishes to deposit the amount with an annual increase of RO 100 for the next 7 years. The bank gives an interest of 6%, compounded annually. Determine the total amount that would be accumulated to his account by the end of 8th year.
Determine the amount of money in a savings account at the end of 4 years, given an initial deposit of $13,000 and a 4 percent annual interest rate when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) a. Annually b. Semiannually c. Quarterly Future Value