Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The

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Wiseman Video plans to make four annual deposits of $2,000 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. Using the appropriate annuity table, determine how much will be accumulated in the fund on December 31, 2014, under each of the following situations:

1. The first deposit is made on December 31, 2011, and interest is compounded annually.

2. The first deposit is made on December 31, 2010, and interest is compounded annually.

3. The first deposit is made on December 31, 2010, and interest is compounded quarterly.

4. The first deposit is made on December 31, 2010, interest is compounded annually, and interest earned is withdrawn at the end of each year.

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...

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Intermediate Accounting

ISBN: 978-0077400163

6th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Question Posted: Jun 24, 2013 07:32 AM

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Wiseman Video plans to make four annual deposits of $2,000 each to a special building fund. The

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1 FVA 2000 47793 9559 Future value of an ordinary annuity of 1 n4 i 12 from Table 3 ...View the full answer

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