Exercise 2.Using the situations provided in Exercise 1, compute the annual interest, totalinterest and amount to be received or paid at the end of the term of eachscenario using a compound interest ass1. You invested P28,000 in govemment securities that yields 5% annually forthree years.2. Your mother obtained a car loan for P900,000 with an annual rate of 12%for 5 years.3. You deposited P10,000 from the savings of your daily allowance in a timedeposit account with your savings bank at a rate of 1.5% per annum. Thiswill mature in 6 months assumption.

Under Compound interest, interest is computed on principal as well as interest earned during the…

Answered: Using the situations provided in…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 8CE

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Use Future Value and Present Value Tables to Apply Compound Interest to Accounting Transactions Kristen Quinn makes equal deposits of $500 semiannually for 4 years. Required: What is the future value at 8%? (Note: Round answers to two decimal places.)
Exercise 1. Compute the annual interest, total interest and the amount to be received or paid at the end of the term for each scenario using a simple interest assumption: 1. You invested P28,000 in govemment securities that yields 5% annually for three years. 2. Your mother obtained a car loan for P900,000 with an annual rate of 12% for 5 years. 3. You deposited P10,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months. Exercise 2. Using the situations provided in Exercise 1, compute the annual interest, total interest and amount to be received or paid at the end of the term of each scenario using a compound interest ass 1. You invested P28,000 in govemment securities that yields 5% annually for three years. 2. Your mother obtained a car loan for P900,000 with an annual rate of 12% for 5 years. 3. You deposited P10,000 from the savings of your daily allowance in a time deposit account with…
1.You have $2,500 to invest today at 9% interest compounded on an annual basis.a. Find how much you will have accumulated in the account at the end of(1) 3 years, (2) 6 years, and (3) 9 years. (Hint: Calculate the FVs)b. Use your findings in part a to calculate the amount of interest received in (1) thefirst 3 years (years 1 to 3), (2) the second 3 years (years 4 to 6), and (3) the third3 years (years 7 to 9). 2.Abul plans to retire in exactly 20 years. His goal is tocreate a fund that will allow him to receive BDT 300,000 at the end of each year for the40 years between retirement and death (his wife told him that he would die exactly 40years after retirement). Abul knows that he will be able to earn 8% per year duringthe 40-year retirement period.a. How large a fund will Abul need when he retires in 20 years to provide the40-year, BDT 300,000 retirement annuity?b. How much will he need today as a single amount to provide the fund calculated in part a if heearns only 6% per year during…
A person wants to borrow as much money as possible today with an annual payment of $1000 at the end of each year for 5 years. If he is charged 7% interest compounded annually, how much could he borrow? Select one: a. $9130.25 b. $6130.25 C. $4130.25 d. $8130.25 The future value of annual deposited started from the end of period one up to year 7, is: Select one: a. A(F/A,i,7) b. A(F/A,i,6) C. P(F/A,I,7) d. P(F/A,i,6)
Compute the annual interest, total interest and the amount to be received or paid at the end of the term for each scenario using a simple interest assumption: 1. You invested P28,000 in government securities that yields 5% annually for three years. 2. Your mother obtaineda car loan for P900,000 with an annual rate of 12% for 5 years. 3. You deposited P10,000 from the savings of your daily allowance in a time deposit account with your savings bank at a rate of 1.5% per annum. This will mature in 6 months.
Suppose you borrowed $3,000 at a rate of 8.8% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be? a. $921.94 b. $657.94 c. $1,014.00 d. $847.38 e. $1,050.94
Suppose you borrowed $25, 000 at a rate of 9.0% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be? Select the correct answer. a. $7, 703.52 b. $7, 729.92 c. $7, 716.72 d. $7, 736.52 e. $7,723.32
If Alvin invest 5500 to day in a saving account. The money will grow to 8500 at the end of the year 4. Assuming that the interest is paid once per year, the effective annual rate of the invent is a. 12.2 b. 12.9 c. 11.5 d. 13.6 E. 10.8
Direction: Compute the annual interest, total interest, and amount to be received or paid at the end of the term for this scenario below using a simple interest assumption and compound interest assumption. Your mother invested ₱18,000 in government securities that yield 6% annually for two years.
1. Mr. Pat Met invested in a bank having an annual payment of Php 100,000 for three years at a 4% annual interest rate. a. How much is the future value? b. Find the total interest earned on the investment.
JG Asset Services is recommending that you invest $1,050 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures? a. $1,247.07 b. $1,274.67 c. $1,283.87 d. $1,265.47 e. $1,256.27
3. Jumbo Bato borrowed money from Rovin Patila,payable for 3 years. If the interest rate per year is 9%, determine the following: a. Total interest due for each year b. Total interest due after 3 years c. Total amount due after 3 years d. Total amount due after 100 days considering the loan was obtained on February14, 2020 e. Total amount due after 5 months considering the loan was obtained in October 2021.

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