ou have a growing payment stream that you want to be able to fully fund by making a single deposit today. The first payment occurs immediately and is $10,000. Each succeeding payment will be 5% higher than the prior payment, and there will be 13 total payments, each one year apart. What is the amount you have to deposit today to fully fund this payment stream if the discount rate is 5% per year? Question content area bottom Part 1 The deposit you need to make is $enter your response here. (Round to the nearest dollar.

ou have a growing payment stream that you want to be able to fully fund by making a single deposit today. The first payment occurs immediately and is $10,000. Each succeeding payment will be 5% higher than the prior payment, and there will be 13 total payments, each one year apart. What is the amount you have to deposit today to fully fund this payment stream if the discount rate is 5% per year? Question content area bottom Part 1 The deposit you need to make is $enter your response here. (Round to the nearest dollar.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

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

See similar textbooks

Question content area bottom

Part 1

The deposit you need to make is

$enter your response here.

(Round to the nearest dollar.)

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: Introduction to time value of money

VIEW

Step 2: Calculating the amount of deposit that needs to be made

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

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Intro You decided to save $1,400 every year, starting one year from now, in a savings account that pays an annual interest rate of 5%. Part 1 74440 How many years will it take until you have $100,000 in the account? 1+ decimals Submit
JUST NEED SUBPARTS D AND E You are trying to decide how much to save for retirement. Assume you plan to save $4,000 per year with the first investment made one year from now. You think you can earn 7.0% per year on your investments and you plan to retire in 29 years, immediately after making your last $4,000 investment. a. How much will you have in your retirement account on the day you retire? b. If, instead of investing $4,000 per year, you wanted to make one lump-sum investment today for your retirement that will result in the same retirement saving, how much would that lump sum need to be? c. If you hope to live for 28 years in retirement, how much can you withdraw every year in retirement (starting one year after retirement) so that you will just exhaust your savings with the 28th withdrawal (assume your savings will continue to earn 7.0% in retirement)? d. If, instead, you decide to withdraw $70,000 per year in retirement (again with the first withdrawal one…
Question Content Area Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,500 over the next 3 years when the interest rate is 15%, how much do you need to deposit in the account? $fill in the blank 1 B. If you place $6,300 in a savings account, how much will you have at the end of 8 years with a 12% interest rate? $fill in the blank 2 C. You invest $9,000 per year for 9 years at 12% interest, how much will you have at the end of 9 years? $fill in the blank 3 D. You win the lottery and can either receive $740,000 as a lump sum or $60,000 per year for 19 years. Assuming you can earn 8% interest, which do you recommend and why? Please round off answers
ces You have a choice of four increasing annuities as shown in the table below. Which annuity will reach a future value of $100,000 the earliest? Annuity B Annuity C $1100 Annuity D $800 $57 8% 3% 52 1 Payment Annual Rate Interest Periods Per Year Annuity A $300 5% 12 (Use the interactive figure to find your answer.) Click here to launch the interactive figure. Choose the correct answer below. OA. Annuity D OB. Annuity A OC. Annuity B OD. Annuity C 9% 4 چلے i, 14e gin MLM Incorrec
What is the value now of an annuity that paysf $6,000 at the end of each of the next 92 years assuming an interest rate is 9% per year? Question content area bottom Part 1 The PV is $enter your response here. (Round to the nearest dollar.)
Quantitative Problem 1: You plan to deposit $2,300 per year for 5 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. $ Assume that your deposits will begin today. What amount will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. $
Imagine you have a credit card balance of $1,000 that you would like to pay off within one year. The annual interest rate on that credit card is 16%, but interest compounds monthly, and you are required to make a payment each month. What amount would you have to pay monthly to pay off this balance within one year? Question options: a $90.71 b $80.66 c $83.33 d $99.12
Required information Problem 10.039 - Retirement account calculations In wisely planning for your retirement, you invest $35,000 per year for 20 years into a 401K tax-deferred account. Assume you make a real retum of 10% per year when the inflation rate averages 3.4% per year. Problem 10.039.a Future dollars in retirement account How many future dollars will you have in the account immediately after your last deposit? You will have $ future dollars in your account immediately after your last deposit.
You plan to invest $5,000 into an account. If you would like to have $10,000 in 15 years, what rate of return must you earn? Question 5 options: 6.02% 5.24% 4.73% 7.55% 7.11%
不 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 15 years $130,000 Click the icon to view some finance formulas. a. The periodic deposit is $ (Do not round until the final answer. Then round up to the nearest dollar as needed.) this View an example Get more help 4 Clear all Chec
Question A What is the relationship between the value of an annuity and the level of interest rates? Suppose you just bought a value of annuity of $7,500 per year at the current interest rate of 10 percent per year. What happens to the value of your investment if interest rates suddenly drop to 5 percent? What if interest rates suddenly rise to 15 percent?.Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line