# Question

Time Value of Money Concept The following situations involve the application of the time value of money concept: 1. Jan Cain deposited $19,500 in the bank on January 1, 1993, at an interest rate of 11% compounded annually. How much has accumulated in the account by January 1, 2010?

2. Mark Schultz deposited $43,200 in the bank on January 1, 2000. On January 2, 2010, this deposit has accumulated to $84,974. Interest is compounded annually on the account. What rate of interest did Mark earn on the deposit?

3. Les Hinckle made a deposit in the bank on January 1, 2003. The bank pays interest at the rate of 8% compounded annually. On January 1, 2010, the deposit has accumulated to $30,000. How much money did Les originally deposit on January 1, 2003?

4. Val Hooper deposited $11,600 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $30,052. For how many years has the deposit been invested?

2. Mark Schultz deposited $43,200 in the bank on January 1, 2000. On January 2, 2010, this deposit has accumulated to $84,974. Interest is compounded annually on the account. What rate of interest did Mark earn on the deposit?

3. Les Hinckle made a deposit in the bank on January 1, 2003. The bank pays interest at the rate of 8% compounded annually. On January 1, 2010, the deposit has accumulated to $30,000. How much money did Les originally deposit on January 1, 2003?

4. Val Hooper deposited $11,600 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $30,052. For how many years has the deposit been invested?

## Answer to relevant Questions

Comparison of Alternatives Darlene Page’s grandparents want to give her some money when she graduates from high school. They have offered Darlene the following three choices:a. Receive $16,000 immediately. Assume that ...Current Ratio Loan Provision Assume that you are the controller of a small, growing sporting goods company. The prospects for your firm in the future are quite good, but like many other firms, it has been experiencing some ...How does the effective interest method of amortization result in a constant rate of interest?Why do firms have a Deferred Tax account? Where should that account be shown on the financial statements? (Appendix)Gain or Loss on Bonds Refer to Brief Exercise 10-5. Assume that the bonds are redeemed on December 31, 2010, at 102. Required1. Calculate the gain or loss on bond redemption.2. Identify and analyze the effect of the bond ...Post your question

0