1. Lynn deposits $683.09 at the beginning of each quarter for three years in order to accumulate $9,500.60. Lynn would like to know what nominal rate of interest compounded quarterly she must earn to accumulate $9,500.60. Answer the following question:

1. Lynn deposits $683.09 at the beginning of each quarter for three years in order to accumulate $9,500.60. Lynn would like to know what nominal rate of interest compounded quarterly she must earn to accumulate $9,500.60. Answer the following question:

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter27: Time Value Of Money (compound)

Section: Chapter Questions

Problem 1E

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

1. Lynn deposits $683.09 at the beginning of
each quarter for three years in order to
accumulate $9,500.60. Lynn would like to know
what nominal rate of interest compounded
quarterly she must earn to accumulate
$9,500.60. Answer the following question:
This question is an example of what?
Show how you find the answer to the nominal
rate p.a. compounded quarterly.
2. Lynn deposits $683.09 at the beginning of
each quarter for three years in order to
accumulate $9,500.60. Lynn would like to know
what nominal rate of interest compounded
quarterly she must earn to accumulate
$9,500.60. Answer the following question:
What variable does $683.09 represent?
3. Lynn deposits $683.09 at the beginning of
each quarter for three years in order to
accumulate $9,500.60. Lynn would like to know
what nominal rate of interest compounded
quarterly she must earn to accumulate
$9,500.60. Answer the following question:
The TVM variable of
should be
set equal to zero in the financial calculator.

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