Intermediate Accounting I sits of $2,000 each to a special building iseman Video

Question

Intermediate Accounting I sits of $2,000 each to a special building iseman Video plans to make four annual depos be invested in mortgage instruments expected to pay interest at 12% on the fund. The fund's assets will fund's balance. uch will be accumulated in the fund on sing the appropriate annuity table, determine how m December 31, 2021, under each of the following situations: 1. The first deposit is made on December 31, 2018, and in 2. The first deposit is made on December 31, 2017, and interest is comporu 3. The first deposit is made on December 31,2017, and 4. The first deposit is made on December 31, 2017, earned is withdrawn at the end of each year. terest is compounded annually nded annually interest is compounded quarterly interest is compounded annually, and i nte

Explanation / Answer

1. 31/12/18 - 31/12/19 = $2000 * 1.12 = $2240

(19-20) $2240* 1.12 = $2508.8

(20-21) $ 2508.8 * 1.12 = $2809.85

2.

(17-18) = $2000 * 1.12 = $2240

(18-19) $2240* 1.12 = $2508.8

(19-20) $2508.8 * 1.12 = $2809.85

(20-21) $2809.85*1.12 = $3147

4. As interest is earned and withdrawn at the end of each year, accumulated funds will remain same i.e $2000

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