FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Which interest gives the lowest present value? (Compounding Monthly)
a. 5,000 monthly, nominal interest of 8%, 5 years
b. 15,000 quarterly, effective interest per period of 2.30%, 5 years
c. 5,000 monthly, interest rate per period of 0.8%, 5 years
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- Assume that a one-year CD purchased for $1000 pays an APR of 6% that is compounded semi-annually. How much is in the account at the end of each compounding period? (Calculate the interest and compound it each period rather than using the compound interest formula. Round your answers to the nearest cent.) first period $ second period $ How much total interest does it earn? (Round your answer to the nearest cent.)$ What is the APY? %arrow_forwardAt a annual effective rate of interest i, payment of $100 from now,$200 two years from now and $100 four years from now have a total present value of $300. Calculate i A.11.7% B.13% C.14.5% D.15.8% E.16.9%arrow_forwardFind the future value of the ordinary annuity. PMT= $2500, i = 7.4% interest compounded quarterly for 15 years A. $270,775.36 B. $405,910.50 C. $64,792.52 D. $398,537.55arrow_forward
- A debt of $1908 with interest at 6.3% compounded annually is to be repaid by equal payments at the end of each year for 4 years. 1. What is the balance remaining (BAL) after the first payment? 2. What is the principal repaid (PRN) in the first period? 3. What is the interest paid (INT) in the first period?arrow_forwardCalculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your answers to the nearest cent. CompoundAmount Term ofInvestment NominalRate (%) InterestCompounded PresentValue CompoundInterest $28,500 18 months 4 semiannually $ $arrow_forwardUsing Table 11-1, calculate the compound amount and compound interest (in $) for the investment. (Round your answers to the nearest cent.) Time Nominal Interest Compound Compound Principal Period (years) Rate (%) Compounded Amount Interest $8,000 4 12 annually Ex Enter a number.arrow_forward
- Using Table 11-2 from your text, calculate the present value (principal) and the compound interest given: A = Compound Amount = $1,250 t = Term of Investment = 6 years r = Nominal rate = 6% or 0.06 n = Interest is compounded semiannually = 2arrow_forward2. Find the present value of $500 due in the future under each of these conditions: a. 12% nominal rate, semiannual compounding, discounted back 5 years b. 12% nominal rate, quarterly compounding, discounted back 5 years c. 12% nominal rate, monthly compounding, discounted back 1 year Hint: identify the interest rate per period and the total number of periods in each scenario first. Oarrow_forwardWhich of the following give the highest amount of interest for depositing the same amount of money for 2 years? 5% annual interest rate, no compounding ○ 4.94% annual interest rate, compounding semi-annually 4.92% annual interest rate, compounding monthly 4.9% annual interest rate, compounding daily 4.88% annual interest rate, compounding continuouslyarrow_forward
- What is the future value of an annuity due of $800 paid semi-annually for the next 7 years, with a yield of 5% p.a. compounded semi-annually? Select one: a. $13,215.16 b. $6,923.22 c. $11,200.00 d. $13,545.54arrow_forwardNonearrow_forward21.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round your answers to the nearest cent. CompoundAmount Term ofInvestment NominalRate (%) InterestCompounded PresentValue CompoundInterest $8,000 12 years 6 semiannually $ $arrow_forward
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