FUNDAMENTAL ACCOUNTING PRINCIPLES
FUNDAMENTAL ACCOUNTING PRINCIPLES
25th Edition
ISBN: 9781307703733
Author: Wild
Publisher: McGraw Hil
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Chapter B, Problem 1QS
To determine

Concept Introduction:

Future value:

Future value refers to the amount to be received in future time. In other words we can say that money that will be received after some time which is calculated with the help of interest rate and number of period interest compunded is known as future value.

Requirement 1:

Interest rate column and number-of-periods row when 12% annual rate, compounded annually.

Expert Solution
Check Mark

Answer to Problem 1QS

Interest rate column = 12th column (Which is given under 12% interest rate).

Number-of-periods row = 3rd row (Which is given in front of 2 number period).

Explanation of Solution

Future value is calculated with the help of following formula;

  Future value = Present value x (1 + r)^n

Interest rate is given = 12%

Number of periods are given = 2

As per Table B.2, we will use column and row as follow;

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter B, Problem 1QS , additional homework tip  1

Thus,

Interest rate column = 12th column (Which is given under 12% interest rate).

Number-of-periods row = 3rd row (Which is given infront of 2 number period).

To determine

Concept Introduction:

Future value:

Future value refers to the amount to be received in future time. In other words we can say that money that will be received after some time which is calculated with the help of interest rate and number of period interest compunded is known as future value.

Requirement 2:

Interest rate column and number-of-periods row when 6% annual rate, compounded semiannually.

Expert Solution
Check Mark

Answer to Problem 1QS

Interest rate column = 3rdcolumn (Which is given under 3% interest rate).

Number-of-periods row = 5th row (Which is given infront of 4 number period).

Explanation of Solution

Future value is calculated with the help of following formula;

  Future value = Present value x (1 + r)^n

Interest rate (6% / 2) = 3%

Number of periods (2 x 2) = 4

As per Table B.2, we will use column and row as follow;

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter B, Problem 1QS , additional homework tip  2

Thus,

Interest rate column = 3rd column (Which is given under 3% interest rate).

Number-of-periods row = 5th row (Which is given infront of 4 number period).

To determine

Concept Introduction:

Future value:

Future value refers to the amount to be received in future time. In other words we can say that money that will be received after some time which is calculated with the help of interest rate and number of period interest compunded is known as future value.

Requirement 3:

Interest rate column and number-of-periods row when 8% annual rate, compounded quarterly.

Expert Solution
Check Mark

Answer to Problem 1QS

Interest rate column = 2nd column (Which is given under 2% interest rate).

Number-of-periods row = 9th row (Which is given infront of 8 number period).

Explanation of Solution

Future value is calculated with the help of following formula;

  Future value = Present value x (1 + r)^n

Interest rate per period (8% / 4) = 2%

Number of periods (2 x 4) = 8

As per Table B.2, we will use column and row as follow;

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter B, Problem 1QS , additional homework tip  3

Thus,

Interest rate column = 2nd column (Which is given under 2% interest rate).

Number-of-periods row = 9th row (Which is given infront of 8 number period).

To determine

Concept Introduction:

Future value:

Future value refers to the amount to be received in future time. In other words we can say that money that will be received after some time which is calculated with the help of interest rate and number of period interest compunded is known as future value.

Requirement 4:

Interest rate column and number-of-periods row when 12% annual rate, compounded monthly.

Expert Solution
Check Mark

Answer to Problem 1QS

Interest rate column = 1stcolumn (Which is given under 1% interest rate).

Number-of-periods row = Not given in the table (n = 24).

Explanation of Solution

Future value is calculated with the help of following formula;

  Future value = Present value x (1 + r)^n

Interest rate per period (12% / 12) = 1%

Number of periods (2 x 12) = 24

As per Table B.2, we will use column and row as follow;

FUNDAMENTAL ACCOUNTING PRINCIPLES, Chapter B, Problem 1QS , additional homework tip  4

Thus,

Interest rate column = 1st column (Which is given under 1% interest rate).

Number-of-periods row = Not given in the table (n = 24)

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