Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Chapter B, Problem 6E
Summary Introduction
Concept Introduction:
Future value is the value of present money after a period of time. Future value of present money is calculated using the interest rate and period. The present value of a sum is multiplied with the future value factor to get the future value.
To calculate: the future value of the investment.
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Catten, Incorporated, Invests $158,170 today earning 7% per year for six years. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use
appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)
Compute the future value of the investment six years from now.
Present Value
Table Factor
Future Value
Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the
investment's value has increased to $7,050 by the end of the year.
a. What is the rate of return for this investment?
Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
Suppose your uncle invested $113,000 in an investment 4 years ago. The investment
is worth now $237,500. The annual interest rate (rate of return) on the investment
during this period must be
% per year.
(Do not include the percent signs (%). Round
your answers to 2 decimal places. (e.g., 32.16))
Chapter B Solutions
Loose Leaf for Financial Accounting: Information for Decisions
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