Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter B, Problem 2AE
To determine
Identify the plan that would provide a larger future amount, calculate the future value of each plan and also explain the plan that provides a larger amount at the end of 10 years.
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Suppose someone wants to accumulate $65,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same.
The person deposits $55 per month into an account with an APR of 7%.
...
Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
O A. No, because the amount that will be in the college fund, $ is less than the goal of $65,000.
OB. Yes, because the amount that will be in the college fund, $
is more than the goal of $65,000.
3
Aronscript
Suppose someone wants to accumulate $50,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the
compounding and payment periods are the same.
The person deposits $140 per month into an account with an APR of 6%
Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
is less than the goal of $50,000.
A. No, because the amount that will be in the college fund, $
OB. Yes, because the amount that will be in the college fund, S
is more than the goal of $50,000
Suppose someone wants to accumulate $40,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to
reach the goal. Assume the compounding and payment periods are the same.
The person deposits $200 per month into an account with an APR of 8%.
Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
OA. Yes, because the amount that will be in the college fund, S
OB. No, because the amount that will be in the college fund, S
is more than the goal of $40,000.
is less than the goal of $40,000.
Chapter B Solutions
Financial Accounting, Student Value Edition (5th Edition)
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