Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Textbook Question
Chapter 7, Problem 7.15BE
Present Value of an Ordinary Annuity. CB Corporation hopes to withdraw $10,000 at the end of each year for six years from a fund that earns 5% interest. How much should the corporation invest today? Draw a timeline to illustrate the problem. Interest is compounded annually.
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GQ Corporation hopes to withdraw 59,000 at the end of each year for six years from a fund that earns 7% interest. How much should the corporation invest today? Draw a timeline to
illustrate the problem. Interest is compounded annually.
(Click the icon to view the Future Value of $1 table.)
(Click the icon to view the Future Value of an Ordinary Annuity table.)
(Click the icon to view the Future Value of an Annuity Due table.)
Caro
today
(Click the icon to view the Present Value of $1 table.)
(Click the icon to view the Present Value of an Ordinary Annuity table)
(Click the icon to view the Present Value of an Annuity Due table)
How much should the corporation invest today? (Use the present value and future value tables, a financial calculator, a spreadsheet or the formula method for your calculations. If
using present and future value tables or the formula method, use factor amounts rounded to five decimal places, XXXXXXX Round your final answer to the nearest cent. SXXX)
The…
What annual deposit is necessary to have $15,000 in 7 years if all the money is deposited at 1.5% interest compounded annually?
(a) State the type.
amortization
sinking fund
ordinary annuity
present value of an annuity
present value
(b) Answer the question. (Round your answer to the nearest cent.)
$
Leberland Corporation deposits $100,000 every year in a savings account (beginning at the end of the current year) for the next eight years so that it can purchase a new piece of machinery at the end of eight years. The interest rate is 5%. How much money will Leberland Corporation have at the end of eight years?Use the future value of an ordinary annuity factor table shown below to derive your answer.Excerpt from future value of an ordinary annuity factor table
Periods
3%
4%
5%
6%
1
1.00000
1.00000
1.00000
1.00000
2
2.03000
2.04000
2.05000
2.06000
3
3.09090
3.12160
3.15250
3.18360
4
4.18363
4.24646
4.31013
4.37462
5
5.30914
5.41632
5.52563
5.63709
6
6.46841
6.63298
6.80191
6.97532
7
7.66246
7.89829
8.14201
8.39384
8
8.89234
9.21423
9.54911
9.89747
9
10.15911
10.58280
11.02656
11.49132
10
11.46338
12.00611
12.57789
13.18079
Group of answer choices
$954,911
$477,456
$431,013
$215,507
Chapter 7 Solutions
Intermediate Accounting (2nd Edition)
Ch. 7 - Prob. 7.1QCh. 7 - Prob. 7.2QCh. 7 - If interest is compounded more than once a year,...Ch. 7 - Prob. 7.4QCh. 7 - Can an ordinary annuity table be used to determine...Ch. 7 - Prob. 7.6QCh. 7 - Is the present value of an ordinary annuity more...Ch. 7 - Prob. 7.8QCh. 7 - Simple Interest. Assume Shafer Corporation...Ch. 7 - Compound Interest. Assume Shafer Corporation...
Ch. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Prob. 7.5BECh. 7 - Present Value of a Single Sum, Compound Interest....Ch. 7 - Future Value of a Single Sum, Compound Interest....Ch. 7 - Prob. 7.8BECh. 7 - Present Value of a Single Sum, Compounded Interest...Ch. 7 - Prob. 7.10BECh. 7 - Present Value of a Single Sum, Calculating Time...Ch. 7 - Future Value of an Ordinary Annuity. An...Ch. 7 - Future Value of an Annuity Due. Mariah Carey...Ch. 7 - Future Value of an Ordinary Annuity: Calculating...Ch. 7 - Present Value of an Ordinary Annuity. CB...Ch. 7 - Present Value of an Annuity Due, Semiannual...Ch. 7 - Prob. 7.17BECh. 7 - Ordinary Annuity, Annuity Due, Using Interest...Ch. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Future Value of an Ordinary Annuity, Future Value...Ch. 7 - Single Sum, Solving for Other Variables. Two...Ch. 7 - Ordinary Annuity, Solve for Interest Rate,...Ch. 7 - Present Value, Note Payable Prices. Wiz Khalifa...Ch. 7 - Future Value of a Deterred Annuity. Lenny Shafer...Ch. 7 - Prob. 7.13ECh. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Future Value of an Annuity Due, Decision Making....Ch. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Present Value of an Ordinary Annuity, Future Value...Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Present Value, Present Value of an Annuity Due,...Ch. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Present Value of an Annuity Due, Deferred...Ch. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Future Value of an Ordinary Annuity, Deferred...Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Prob. 7.12PCh. 7 - Prob. 7.13PCh. 7 - Expected Cash Flows. Hiteck Electronics sells a...Ch. 7 - Prob. 7.15P
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