1. On January 1, 2016, a company agrees to pay $21,000 in seven years. If the an
ID: 2803987 • Letter: 1
Question
1. On January 1, 2016, a company agrees to pay $21,000 in seven years. If the annual interest rate is 7%, determine how much cash the company can borrow with this agreement. (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.)
2. Mark Welsch deposits $7,600 in an account that earns interest at an annual rate of 8%, compounded quarterly. The $7,600 plus earned interest must remain in the account 4 years before it can be withdrawn. How much money will be in the account at the end of 4 years?
Explanation / Answer
1)
Company can borrow FV×(1÷(1+r)^n) Here, 1 rate per annum 7.00% 2 Number of years 7 3 Number of compoundings per per annum 1 4 = 1÷3 rate per period ( r) 7.00% 5 = 2×3 Number of periods (n) 7 Future value (FV) $ 21,000.00 Company can borrow $ 13,078 21000*(1/(1+7%)^7)Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.