Time Value of Money: Basics Using the equations and tables in Appendix 12A of this...
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Accounting
Time Value of Money: Basics Using the equations and tables in Appendix 12A of this chapter, determine the answers to each of the following independent situations.
Round answers to the nearest whole number. (a) The future value in three years of $1,000 deposited today in a savings account with interest compounded annually at 4 percent. $ Answer
(b) The present value of $8,000 to be received in two years, discounted at 12 percent. $ Answer (c) The present value of an annuity of $9,000 per year for three years discounted at 10 percent. $ Answer (d) An initial investment of $17,241 is to be returned in eight equal annual payments. Determine the amount of each payment if the interest rate is 8 percent. $ Answer (e) A proposed investment will provide cash flows of $20,000, $6,000, and $6,000 at the end of Years 1, 2, and 3, respectively. Using a discount rate of 14 percent, determine the present value of these cash flows. Year 1 $ Answer Year 2 $ Answer Year 3 $ Answer (f) Find the present value of an investment that will pay $3,000 at the end of Years 10, 11, and 12. Use a discount rate of 12 percent. $ Answer
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