Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. mack aroni, a bank robber, is worried about his re

Mack Aroni, a bank robber, is worried about his retirement. He decides to start a...

70.2K

Verified Solution

Question

Accounting

image

Mack Aroni, a bank robber, is worried about his retirement. He decides to start a savings account. Mack deposits annually his share of the "loot" which consists of $75,000 a year, for 3 years beginning January 1,2013. Mack is arrested on January 4,2015 (after making the third deposit), and spends the rest of 2015 and most of 2016 in jail. He escapes in September of 2016. He resumes his savings plan with semi-annual deposits of $30,000 each beginning January 2017. Assume the bank's interest rate was 9% compounded annually from January 1 , 2013, through January 1, 2016, and 12% annual rate semiannually thereafter INSTRUCTIONS: When Mack retires on January 1,2020 (6 months after his last deposit), what is the balance in his savings account? HINT: This is a deferred annuity problem 1. Calculate the future value of the $75,000 during the annuity period (2013, 2014, & 2015) 2. Calculate the future value of the sum in step 1 for the deferral period (2016-2019). 3. Calculate the future value of the $30,000 annuity during its annuity period (2017-2019) 4. Add steps 2 & 3. 5. This is an annuity due because the payment begin at the start date (or end before he starts collecting his retirement)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

The amounts a soft drink machine is designed to dispense for each drink are normally distributed,...

Biology
1.2K views

How does primary endosymbiosis from more complex organisms? You are a scientist studying the possibility of...

Biology
1.2K views

Organisms use different sources of carbon and energy. Archaeans do NOT use glycolysis and do NOT...

Biology
1.2K views

Which of the following occurs in meiosis but not in mitosis?condensation of chromosomesseparation of sister...

Biology
1.2K views

Smoking damages the cilia present on many respiratory epithelial cells. Why is this a problem...

Biology
1.2K views

The oldest known fossils on earth are Ostromatolites Obrown algae O sharks O fungus

Basic Math
1.2K views

r 6 puy on suomun uavis air asn x 4 and g z x 3...

Accounting
1.2K views

1. a. Explain and give an example of assertion/audit objective level as it relates to...

Accounting
1.2K views

Hodge Co. exchanged Building 24 which has an appraised value of $4,971,000, a cost of...

Accounting
1.2K views

The Regal Cycle Company manufactures three types of bicyclesa dirt bike, a mountain bike, and...

Accounting
1.2K views

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired...

Finance
1.2K views

Related to Checkpoint 13.2 and Checkpoint 13.3) Comprehensive risk analysis) Blinkeriais considering introducing a new...