In the case that the result is decimal, you will round it to two decimal places. 3. The new parents decide to invest $ 100 a month in an annuity for their young daughter. The account will pay 5% interest per year, which is compounded monthly. How much will be in the child's account when he turns eighteen?

In the case that the result is decimal, you will round it to two decimal places. 3. The new parents decide to invest $ 100 a month in an annuity for their young daughter. The account will pay 5% interest per year, which is compounded monthly. How much will be in the child's account when he turns eighteen?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5MC: If you are saving the same amount each month in order to buy a new sports car when the new models...

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In the following exercises and problems you will be able to:• model investment and annuity problems;• explain the difference between sequences and series;• solve exercises applying concepts of the sum of sets of terms of a sequence, and• solve problems related to annuities using sequences or seriesIn the case that the result is decimal, you will round it to two decimal places. 4. New grandparents decide to invest $ 200 a month in an annuity for their grandchild. The account will pay 5% interest per year, which is compounded monthly. How much will be in the child's account when he turns 21?
In the following exercises and problems you will be able to:• model investment and annuity problems;• explain the difference between sequences and series;• solve exercises applying concepts of the sum of sets of terms of a sequence, and• solve problems related to annuities using sequences or seriesIn the case that the result is decimal, you will round it to two decimal places. 5. Arturo just got his first full-time job after graduating from college at age 27. He decided to invest $ 200 a month in an IRA (an annuity). The interest on the annuity is 8%, which is compounded monthly. How much will be in Arturo's account when he retires at sixty-seven?
Find an exponential model for the account balance. (Let t be the time in months and B the savings balance in dollars. Round your parameters to three decimal places.) (e) Suppose that you made this investment on the occasion of the birth of your daughter. Your plan is to leave the money in the account until she starts college at age 17. How large a college fund will she have? (Round your answer to the nearest cent.)$ (f) How long does it take your money to double in value? (Round your answer to two decimal places.) monthsHow much longer does it take it to double in value again? (Round your answer to two decimal places.) months
Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 4% per year. The parents deposit $ 10,000 on their daughter's first birthday and plan to increase the size of their deposits by 2% each year. Assuming that the parents have already made the deposit for their daughter's 18th birthday, then the amount available for the daughter's college expenses on her 18th birthday is closest to: $1,012,908 $ 147,489 $500,000 $298,785
(Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows in the popup window: LOADING... . If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? a. What rate of return could Nicki earn on her money if she place it in annuity A with $7,000 payment per year and 10 years duration? nothing% (Round to two decimal places.) Help Me Solve ThisView an Example Get More Help Clear All Check Answer Data Table ANNUITY INITIAL PAYMENT INTO ANNUITY (AT t = 0) AMOUNT OF MONEY RECEIVED PER YEAR DURATION OF ANNUITY (YEARS) A $40,000…
(Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows If Nicki could earn 11 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? a. What rate of return could Nicki earn on her money if she place it in annuity A with $6500 payment per year and 16 years duration?
Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 7%. The parents deposit $2000 on their daughter's first birthday and plan to increase the size of their deposits by 5% each year. Assuming that the parents have already made the deposit for their daughter's 18th birthday, then what is the amount available for the daughter's college expenses on her 18th birthday?
A couple wants to begin saving money for their daughter's education. $16,000 will be needed on the child’s 18th birthday, $18,000 on the 19th birthday, $20,000 on the 20th birthday, and $22,000 on the 21st birthday. Assume 5% interest with annual compounding. The couple is considering two methods of accumulating the money. a. How much money would have to be deposited into the account on the child's first birthday to accumulate enough money to cover the education expenses? (Note: A child’s “first birthday” is celebrated 1 year after the child is born.) b. What uniform annual amount would the couple have to deposit each year on the child’s first through seventeenth birthdays to accumulate enough money to cover the education expenses?
Compute the value for each of the following independent situations. Note: Use Excel or a financial calculator. Round your answers to 2 decimal places. 1. To save for their new child's college education, a couple places $28,400 in an account. What amount will accumulate in the account at the end of 18 years, assuming an interest rate of 7.25% compounded annually? 2. An individual has just inherited a piece of land. The individual plans to hold the land for three years and then expects the land to sell for $208,500. What is the value today of inheriting the land, assuming an interest rate of 8.5% compounded annually? 3. To save money for the down payment on a house, an individual places $6,700 in an account at the end of each quarter. What amount will accumulate in the account at the end of four years, assuming an interest rate of 9.75% compounded quarterly? 4. To purchase a car, an individual agrees to pay $1,140 at the end of each month for the next six years. What is the cost of the…
Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthdays, starting with her first birthday. Assume that the educational savings account will return a constant 7%. The parents deposit $2000 on their daughter's first birthday and plan to increase the size of their deposits by 5% each year. Draw a timeline that details the amount that would be available for the daughter's college expenses on her 18th birthday, and identify the amount she would have for college.
(Quantitative Question) Suppose that a young couple has just had their first baby and they wish to insure that enough money will be available to pay for their child's college education. They decide to make deposits into an educational savings account on each of their daughter's birthday, starting with her first birthday till her 18th birthday. Suppose college tuition, books, fees, and other costs average $12400 per year today. Assume that college costs continue to increase an average of 4.8% per year and that the interest earned on the savings account is 7.9% per year. How much money will the couple's first baby need to have available at age 18 to pay for all four years of her college (assuming that college costs for the year are incurred at the beginning of the year)? Write the answer both in the space provided and on the empty pages on which you will also show your work (Including timelines).
Need answers and Solutions ASAP... Bob and Mary Johnson are expecting their first child. They have decided to deposit $1000 into a savings account that pays 6% interest compounded annually on the day the child is born. They will then deposit $1000 on each birthday through the child’s 18th birthday. How much money will be in the account on the child’s 19th birthday to finance a college education (Answer: $35,786)