Question: Computing Future and Present Value Under Different Investment Assumptions When answering the following questions, round your answer to the nearest whole numb Do not use

Computing Future and Present Value Under Different Investment Assumptions When answering the following questions, round your answer to the nearest whole numb Do not use a negative sign with your answer. Stone Inc. deposits $40,000 today into a special fund that is needed at the end of six years. A financial institution serves as the fund trustee and pays 10% interest on the fund balance. Compute the fund balance at the end of year 6 assuming annual compounding 2. On January 1 of the current year, Southwest Inc. adopts a plan to accumulate funds for environmental improvements to occur 4.5 years in the future, at an estimated cost of $2,000,000 Southwest plans to make four equal annual deposits in a fund that earns interest at 10% compounded annually . The first deposit is made on July 1 of the current year. Compute the amount of the annual deposit 3. Hanks Inc. establishes a debt retirement fund to retire debt of $72,820. Hanks makes three equal annual contributions of $ 20,000, starting on January 1 of the current year. The fund earns interest at 10%, compounded annually. The $72,820 debt must be paid on December 31, three years later. What is the balance of the fund at December 31 in three years? 4. Gold Inc. invests $10,000 today in a mutual fund . Gold anticipates leaving this fund alone for 12 years. The fund is increased each year -end by specified compound interest rates as follows : years 1 to 4 inclusive ,8%5 to 8 inclusive, 9% and 9 to 12 inclusive ,10%Compute the fund balance at the end of year 12.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!