Find the present value of $40,000 due in 4 years at the given rate of interest 8%/year
Question:
Find the present value of $40,000 due in 4 years at the given rate of interest 8%/year compounded monthly.
A. | The present value is $28,948.67. | |
B. | The present value is $29,433.94. | |
C. | The present value is $29,076.82. | |
D. | The present value is $29,748.06. |
Question 7
In order to help finance the purchase of a new house, the Abdullahs have decided to apply for a short-term loan (a bridge loan) in the amount of $140,000 for a term of 1 mo. If the bank charges simple interest at the rate of 12%/year, how much will the Abdullahs owe the bank at the end of the term?
A. | $141,400 | |
B. | $140,012 | |
C. | $146,800 | |
D. | $144,900 |
Question 8
The Kwans are planning to buy a house 6 years from now. Housing experts in their area have estimated that the cost of a home will increase at a rate of 6%/year during that period. If this economic prediction holds true, how much can the Kwans expect to pay for a house that currently costs $160,000?
A. | $218,199 | |
B. | $221,562 | |
C. | $230,490 | |
D. | $226,963 |
Question 9
The manager of a money market fund has invested $4.2 million in certificates of deposit that pay interest at the rate of 5.4%/year compounded quarterly over a period of 5 years. How much will the investment be worth at the end of 5 years?
A. | 5,491,921.88 | |
B. | 3,211,990.34 | |
C. | 1,291,921.88 | |
D. | 12,024,347.20 |
Question 10
Find the effective rate corresponding to nominal rate 6% / year compounded monthly. Round the answers to the nearest hundredth of percent.
A. | 6.538% | |
B. | 5.858% | |
C. | 6.598% | |
D. | 6.168% |
Question 11
Find the interest rate needed for an investment of $4,000 to grow to an amount of $5,000 in 4 yr if interest is compounded continuously. Please round the answer to the nearest hundredth of percent.
A. | 5.58 %/yr | |
B. | 5.70 %/yr | |
C. | 6.63 %/yr | |
D. | 5.01 %/yr | |
E. | 5.92 %/yr |
Question 12
Anthony invested a sum of money 6 yr ago in a savings account that has since paid interest at the rate of 7%/year compounded quarterly. His investment is now worth $19,713.77. How much did he originally invest? Please round the answer to the nearest cent.
A. | $13,000.01 | |
B. | $12,500.01 | |
C. | $14,000.01 | |
D. | $11,500.01 | |
E. | $11,000.01 |
Question 13
Georgia purchased a house in 1998 for $220,000. In 2003 she sold the house and made a net profit of $50,000. Find the effective annual rate of return on her investment over the 5-yr period. Please round the answer to the nearest tenth of percent.
A. | 3.7%/yr | |
B. | 3.1%/yr | |
C. | 4.4%/yr | |
D. | 4.2%/yr | |
E. | 5.6%/yr |
Question 14
Find the amount of an ordinary annuity of 10 yearly payments of $1,800 that earn interest at 10% per year, compounded annually.
A. | $4,668.74 | |
B. | $28,687.36 | |
C. | $87,798.04 | |
D. | $3,600.00 |
Question 15
Robin, who is self-employed, contributes $4,000/year into a Keogh account. How much will he have in the account after 15 years if the account earns interest at the rate of 6.5%/year compounded yearly?
A. | $96,728.68 | |
B. | $10,287.36 | |
C. | $158,267.14 | |
D. | $3,771.28 |
Question 16
If a merchant deposits $1,500 annually at the end of each tax year in an IRA account paying interest at the rate of 10%/year compounded annually, how much will she have in her account at the end of 25 years? Round your answer to two decimal places.
A. | $16,252.06 | |
B. | $147,520.59 | |
C. | $5,250.00 | |
D. | $34,663.65 |
Question 17
Find the present value of an ordinary annuity of $600 payments each made quarterly over 5 years and earning interest at 4% per year compounded quarterly.
A. | $8,154.20 | |
B. | $2,671.09 | |
C. | $10,827.33 | |
D. | $56,916.87 |
Question 18
Juan invested $24,000 in a mutual fund 5 years ago. Today his investment is worth $34,616. Find the effective annual rate of return on his investment over the 5-year period.
A. | 10.3%/year | |
B. | 8%/year | |
C. | 83%/year | |
D. | 8.3%/year |
Question 19
Find the amount of an ordinary annuity for 5 years of quarterly payments of $2,200 that earn interest at 4% per year compounded quarterly.
A. | $11,222.21 | |
B. | $65,511.77 | |
C. | $48,441.81 | |
D. | $2,684.42 |
Question 20
Find the present value of the ordinary annuity. Please round the answer to the nearest cent.$2,000 per semiannual period for 7 yr at 12%/year compounded semiannually
A. | P = $18,589.97 | |
B. | P = $17,913.54 | |
C. | P = $20,003.52 | |
D. | P = $13,147.80 | |
E. | P = $9,629.07 |
Expert Answer:
QUESTION 6 Present ValueFV1rnnt Where FV40000 r008 n12 t4 years Therefore PV40000100812 124 40000108 ... View the full answer
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
