A company plans to make four annual deposits of $6,000 each to a special building fund....

Transcribed Image Text:

A company plans to make four annual deposits of $6,000 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $6,000 annual deposit are made at the end of each of the four years and interest is compounded annually. 2. The $6,000 annual deposit are made at the beginning of each of the four years and interest is compounded annually. 3. The $6,000 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly. 4. The $6,000 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The $6,000 annual deposits are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year. Deposit Amount $ 6,000 Number of Interest left in Payments Fund 4 Fund Balance A company plans to make four annual deposits of $6,000 each to a special building fund. The fund's assets will be invested in mortgage instruments expected to pay interest at 12% on the fund's balance. Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) Required: Determine how much will be accumulated in the fund after four years under each of the following situations: 1. The $6,000 annual deposit are made at the end of each of the four years and interest is compounded annually. 2. The $6,000 annual deposit are made at the beginning of each of the four years and interest is compounded annually. 3. The $6,000 annual deposit are made at the beginning of each of the four years and interest is compounded quarterly. 4. The $6,000 annual deposit are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The $6,000 annual deposits are made at the beginning of each of the four years interest is compounded annually, and interest earned is withdrawn at the end of each year. Deposit Amount $ 6,000 Number of Interest left in Payments Fund 4 Fund Balance

Answer rating: 100% (QA)

To calculate the accumulated amount in the fund after four years for each situation we can use the future value of an ordinary annuity formula FV P 1 ... View the full answer