Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter II, Problem 8E
Refer to the answers given for the preceding exercise.
Required:
- 1. Refer to requirement (1) of the preceding exercise. Prepare a display similar to Exhibit II-1 to show how your accumulation grows each year to equal $5,487.50 after six years.
- 2. Refer to requirement (4) of the preceding exercise. Prepare a display similar to Exhibit II-3 to verify that $32,331 is the amount you need to fund your educational expenses.
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Draw a timeline in your notes to practice, then use the one below to help you! The Cambrian Foundation collected $49,431.67 to set up a fund for graduating students for the next 10 years. This was set up to help reduce the burden of student loans upon graduation. The first graduating class is will be eligible to apply for the funding in three years. What is the size of the end-of-year funding available if money earns 3.3% compounded semi-annually?
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SPECIFIC INSTRUCTION: Solve each problem NEATLY and SYSTEMATICALLY. Show your
COMPLETE solutions and BOX your final answers. Express all your answers in 2 decimal places.
PROBLEM:
Annual deposits were made in a fund earning 10% per annum. The first deposit was P2,000 and
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fund after the sixth deposit.
(c) As part their responsible business initiative, Micron Industries wants to establish a trust fund to assist under-privileged students in their local community in pursuing 4-year undergraduate degree programs. The tuition fee is estimated to be $35,000 for the first year but is expected to increase by 5% per year thereafter.
Required:i. Assuming this trust fund will earn 7.5% interest per annun, calculate the amount required at the start of one student’s college journey to fund his/her full tuition.Â
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Chapter II Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
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