1) Jerry Rees invested $6,100 at 5% annual interest, and left the money invested
ID: 2426513 • Letter: 1
Question
1) Jerry Rees invested $6,100 at 5% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Jerry withdrew the accumulated amount of money.(use the factor table)
a) What amount did Jerry withdraw, assuming the investment earns simple interest
(b) What amount did Jerry withdraw, assuming the investment earns interest compounded annually? (Round answer to 2 decimal places, e.g. 25.2
2) Mayer Company signed a lease for an office building for a period of 10 years. Under the lease agreement, a security deposit of $7,200 is made. The deposit will be returned at the expiration of the lease with interest compounded at 8% per year.(use the factot table)
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What amount will Mayer receive at the time the lease expires? (Round answer to 2 decimal places, e.g. 25.25.)
3)Ekman Company issued $1,100,000, 11-year bonds and agreed to make annual sinking fund deposits of $71,500. The deposits are made at the end of each year into an account paying 6% annual interest.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What amount will be in the sinking fund at the end of 11 years? (Round answer to 2 decimal places, e.g. 25.25.)
4)Terry and Jessica Benedict invested $6,300 in a savings account paying 8% annual interest when their daughter, Kristi, was born. They also deposited $1,400 on each of her birthdays until she was 15 (including her 15th birthday).
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
How much was in the savings account on her 15th birthday $ (after the last deposit)? (Round answer to 2 decimal places, e.g. 25.25.)
5)
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
(a) What is the present value of $25,600 due 10 periods from now, discounted at 10%? (Round answer to 2 decimal places, e.g. 25.25.)
(b) What is the present value of $25,600 to be received at the end of each of 7 periods, discounted at 6%? (Round answer to 2 decimal places, e.g. 25.25.)
6) Elmdale Company is considering an investment that will return a lump sum of $725,500, 6 years from now.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What amount should Elmdale Company pay for this investment to earn a 12% return? (Round answer to 2 decimal places, e.g. 25.25.)
Elmdale Company should pay
7)
Orear Company earns 6% on an investment that will return $491,500, 8 years from now.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What is the amount Orear should invest now to earn this rate of return? (Round answer to 2 decimal places, e.g. 25.25.)
8) Dayton Company is considering investing in an annuity contract that will return $34,300 annually at the end of each year for 19 years.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What amount should Dayton Company pay for this investment if it earns a 9% return?
9)
Nolasko Enterprises earns 12% on an investment that pays back $90,100 at the end of each of the next 7 years.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What is the amount Nolasko Enterprises invested to earn the 12% rate of return? (Round answer to 2 decimal places, e.g. 25.25.)
10)
Brief Exercise D-15
Robertson Company receives a $75,700, 8-year note bearing interest of 10% (paid annually) from a customer at a time when the discount rate is 10%.
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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What is the present value of the note received by Robertson? (Round answer to 2 decimal places, e.g. 25.25.)
$
Explanation / Answer
1) a simple interest = 6100 * 5 *12 year /100
= $3660
Accumulated Amount = 6100 + 3660
= 9760
b Amount = 6100 ( 1 + 0.05)12
= 6100 * 1.796
= $10955.6
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