Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter M, Problem 1E
1.
To determine
Determine the future value on January 1, 2026, for the amount of $40,000 deposited on January 1, 2019 at an annual interest rate of 12%, using compound interest.
2.
To determine
Determine the future value on January 1, 2025, for the amount of $10,000 deposited on July 1, 2019 at an annual interest rate of 16%, which is compounded quarterly.
3.
To determine
Determine the amount of compound interest earned on a five year period, for the investment of $6,000 at 10% interest compounded annually.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Use the present value tables to answer the following questions.
Required:1) What is the present value of a $100,000 loan issued on January 1, 2020, due on January 1, 2025, discounted at 14% compounded annually?
2) What is the present value of a $100,000 loan issued on January 1, 2020, due on July 1, 2025, discounted at 16% compounded quarterly?
3) How much is the difference between the face amount of $25,000 and the present value of $25,000 due at the end of sevenyearsat9%compoundedannually?
Future Value of an Investment
Using the future value tables, solve the following.
(Click here to access the time value of money tables to use with this problem.)
Round your answers to two decimal places.
Required:
1. What is the future value on December 31, 2020, of a deposit of $35,000 made on January 1, 2017, assuming interest of 10% compounded annually?
2. What is the future value on December 31, 2020, of a deposit of $10,000 made on January 1, 2017, assuming interest of 16% compounded quarterly?
3. What is the future value on December 31, 2020, of a deposit of $25,000 made on January 1, 2017, assuming interest of 12% compounded semiannually?
$
EM-1 Future Value and Compound Interest Using the future value tables, solve the following.
Required:
1. What is the value on January 1, 2026, of $40,000 deposited on January 1, 2019, which accumulates interest at 12% compounded annually?
2. What is the value on January 1, 2025, of $10,000 deposited on July 1, 2019, which accumulates interest at 16% compounded quarterly?
3. What is the compound interest on an investment of $6,000 left on deposit for 5 years at 10% compounded annually?
Chapter M Solutions
Intermediate Accounting: Reporting And Analysis
Ch. M - Explain interest.Ch. M - Prob. 2GICh. M - Prob. 3GICh. M - Prob. 4GICh. M - Prob. 5GICh. M - Prob. 6GICh. M - Prob. 7GICh. M - Prob. 8GICh. M - Prob. 9GICh. M - Prob. 10GI
Ch. M - Prob. 11GICh. M - Prob. 12GICh. M - Prob. 13GICh. M - Prob. 14GICh. M - Prob. 15GICh. M - Prob. 16GICh. M - Prob. 17GICh. M - Prob. 18GICh. M - Prob. 19GICh. M - Prob. 20GICh. M - Prob. 21GICh. M - Prob. 22GICh. M - What is a deferred ordinary annuity? How does it...Ch. M - Prob. 24GICh. M - Prob. 25GICh. M - Give two examples of assets and three examples of...Ch. M - Prob. 1MCCh. M - Prob. 2MCCh. M - Refer to the present value table information on...Ch. M - Refer to the present value table information on...Ch. M - On May 1, 2019, a company purchased a new machine...Ch. M - An office equipment representative has a machine...Ch. M - Prob. 7MCCh. M - For which of the following transactions would the...Ch. M - On July 1, 2019, James Rago signed an agreement to...Ch. M - On January 1, 2019, Ken Company sold a machine to...Ch. M - Prob. 1RECh. M - Based on the following annual interest rates, what...Ch. M - Prob. 3RECh. M - Prob. 4RECh. M - Next Level Potter wishes to deposit a sum that at...Ch. M - Prob. 6RECh. M - Prob. 7RECh. M - Prob. 8RECh. M - Prob. 9RECh. M - If 90,000 is invested in a fund on December 31,...Ch. M - Samuel Ames owes 20,000 to a friend. He wants to...Ch. M - Prob. 12RECh. M - Prob. 13RECh. M - Prob. 14RECh. M - Prob. 1ECh. M - Future Value Hugh Colson deposited 20,000 in a...Ch. M - Prob. 3ECh. M - Future Value of Annuity Using appropriate tables,...Ch. M - Prob. 5ECh. M - Prob. 6ECh. M - Prob. 7ECh. M - Cash Flow Amounts R. Lee Rouse borrows 10,000 that...Ch. M - Prob. 9ECh. M - Amount of an Annuity John Goodheart wishes to...Ch. M - Prob. 11ECh. M - Prob. 12ECh. M - Present Value of Leased Asset On January 1, 2019,...Ch. M - Amount of an Annuity Beginning December 31, 2023,...Ch. M - Prob. 1PCh. M - Prob. 2PCh. M - Prob. 3PCh. M - Determining Loan Repayments Jerry Rockness needs...Ch. M - Prob. 5PCh. M - Prob. 6PCh. M - Value of an Annuity Using the appropriate tables,...Ch. M - Serial Installments; Amounts Applicable to...Ch. M - Prob. 9PCh. M - Comprehensive Part a. Reproduced in the following...Ch. M - Prob. 11PCh. M - Present Value of an Annuity John Joshua wants to...Ch. M - Present Value of an Annuity Ralph Benke wants to...Ch. M - Compound Interest Issues You are given the...Ch. M - Cash Flow Amounts On January 1, 2019, Philip...Ch. M - Prob. 16PCh. M - Comprehensive The following are three independent...Ch. M - Prob. 18PCh. M - Asset Purchase Price BWP Inc. is considering the...Ch. M - Prob. 1CCh. M - Prob. 2CCh. M - Prob. 3CCh. M - Prob. 4CCh. M - Prob. 5C
Knowledge Booster
Similar questions
- Present Value Computations Using the present value tables, solve the following. (Click here to access the time value of money tables to use with this problem.) Round your answers to two decimal places. Required: 1. What is the present value on January 1, 2016, of $30,000 due on January 1, 2020, and discounted at 10% compounded annually? 2. What is the present value on January 1, 2016, of $40,000 due on January 1, 2020, and discounted at 11% compounded semiannually? $ 3. What is the present value on January 1, 2016, of $50,000 due on January 1, 2020, and discounted at 16% compounded quarterly? $arrow_forwardEX.M.106 Use the future value tables to answer the following questions. (Click here to access the PV and FV tables to use with this problem.) Required: Round your answers to the nearest dollar. 1. What is the value on January 1, 2027, of $75,000 deposited on January 1, 2020, which accumulates interest at 14% annually? $___________ 2. What is the value on January 1, 2025, of $15,000 deposited on July 1, 2020, which accumulates interest at 16% compounded quarterly? $__________ 3. How much interest will accumulate on an investment of $10,000 left on deposit for 7 years at 8% compounded annually? $__________arrow_forwardPV and FV Tables:: 1. What is the present value on January 1, 2019, of $30,000 due on January 1, 2024, and discounted at 12% compounded annually? $____________ 2. What is the present value on July 1, 2019, of $8,000 due January 1, 2024, and discounted at 16% compounded quarterly? $_____________ 3. What is the amount of the present value discount (the difference between future value and present value) on $8,000 due at the end of 5 years at 10% compounded annually? $__________________ 4. What is the future value on December 31, 2023, of a deposit of $35,000 made on January 1, 2020, assuming interest of 10% compounded annually? $____________ 5. What is the future value on December 31, 2023, of a deposit of $10,000 made on January 1, 2020, assuming interest of 16% compounded quarterly? $_________________ 6. What is the future value on December 31, 2023, of a deposit of $25,000 made on January 1, 2020, assuming interest of 12% compounded semiannually? $____________ 7. What…arrow_forward
- What will be the future value on December 31, 2023, of 5 annual $60,000 deposits starting on December 31, 2019, if the amounts earn 8% compounded annually? (Click here to access the PV and FV tables to use with this problem.) Round your answer to two decimal places. $ _________arrow_forwardRequired 1 Calculate the future value. On January 1, 2020, $30,000 is deposited into a savings account. Assuming a 4% interest rate, calculate the amount accumulated on January 1, 2023, if interest is compounded annually. N (period of time) | (Interest) PV (Present Value FV (Future Value) PMT (Annuity) On January 1, 2020, $30,000 is deposited into a savings account. Assuming a 4% interest rate, calculate the amount accumulated on January 1, 2023, if interest is compounded semi-annually. N (period of time) | (Interest) PV (Present Value FV (Future Value) PMT (Annuity) Page 1 On January 1, 2020, $30,000 is deposited into a savings account. Assuming a 4% interest rate, calculate the amount accumulated on January 1, 2023, if interest is compounded quarterly. N (period of time) | (Interest) PV (Present Value FV (Future Value) PMT (Annuity) 2 In each of the three scenarios the FV should continue to increase. Explain why this passes the reasonablenes test.arrow_forwardPrepare the amortization table for 2025, assuming that amortization is recorded on interest payment dates using the effective-interest method. (Round answers to 0 decimal places, e.g. 25,000.) Date Cash Expense Amortization Carrying Amount 1/1/25 $enter a dollar amount 6/30/25 $enter a dollar amount $enter a dollar amount $enter a dollar amount enter a dollar amount 12/31/25 enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amountarrow_forward
- EX.M.104 Use the compound interest tables to answer the following questions. (Click here to access the PV and FV tables to use with this problem.) Required: Round your answers to the nearest dollar. a. How much will be accumulated on January 1, 2024 if $450,000 is deposited on January 1, 2020, and interest is compounded annually at 10%? $__________________ b. How much will be accumulated on December 31, 2028 if $80,000 is deposited on December 31, 2020, and the fund pays 9% interest compounded semiannually? $__________________ c. What will be on deposit on January 1, 2025 if $50,000 is deposited on January 1, 2020, in a fund that earns 16% interest compounded quarterly? $______________________arrow_forwardDetermine the value of the single payment on November 8, 2023 that is economically equivalent to a payment stream consisting of: ● a payment of $10,670 on April 3, 2023, . a payment of $9,970 on September 6, 2023, ● a payment of $8,250 on January 31, 2024. Assume a simple interest rate of 3.1%. Apr. 3, 2023 $10,670 FV2 = $ FV1 = $ PV3 = $ Start by calculating the following values on the time diagram: Sep. 6, 2023 Total = $9,970 The single payment on November 8, 2023 is: $ Nov. 8, 2023 + FV2 FV1 + PV3 Total Jan. 31, 2024 $8,250arrow_forwardUse the formula for computing future value using compound interest to determine the value of an account at the end of 8 years if a principal amount of $13,000 is deposited in an account at an annual interest rate of 5% and the interest is compounded quarterly. The amount after 8 years will be $ (Round to the nearest cent as needed.) Enter your answer in the answer box and then click Check Answer. All narts showing javascript:doExercise(9); Clear All Check Answer sy Po a 99+arrow_forward
- Presented here are summarized data from the balance sheets and Income statements of Wiper Inc.: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2019 $ 900 2,050 $2,950 2018 $700 2020 Current assets other assets $ 650 2,750 $3,400 1,750 $2,450 Total assets Current liabilities Long-term 1iabilities Stockholders' equity $ 700 800 500 800 1,500 1,400 $3,400 1,000 1,150 $2,950 950 Total liabilities and stockholders equity $2,450 WIPER INC. Selected Income Statement and other Data For the year Ended December 31, 2020 and 2019 (in millions) 2020 2019 Income statement data: Sales $3,300 380 80 300 $2,900 300 Operating income Interest expense Net income other data: Average number of common shares outstanding Total dividends paid 70 230 44 42 50 30 Requlred: a. Calculate return on Investment, based on net Income and average total assets, for 2020 and 2019. b. Calculate return on equlty for 2020 and 2019. c. Calculate working capital and the current ratlo for each…arrow_forwardCalculate the future value of the following annuities, assuming each annuity payment is made at the end of each compounding period. (FV of $1. PV of $1, EVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) 1. Annuity Payment $ 3,700 Annual Rate Interest Period Compounded Invested Future Value of Annuity 7.0% Semiannually 9 years 2. 6,700 8.0% Quarterly 5 years 3. 5,700 12.0% Annually 6 yearsarrow_forwardCompute the interest rate if future value (FV) = $7198, present value (FV) = $2694, and number of years (t) = 9arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning