If you owe $32,000 payable at the end of five years, what amount should your creditor accept in payment immediately if she could earn 12 percent on her money? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Present value

If you owe $32,000 payable at the end of five years, what amount should your creditor accept in payment immediately if she could earn 12 percent on her money? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Present value

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 11RE: Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the...

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Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
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PART A: Time Value of Money Please indicate your final answers (rounded to the nearest dollar) in the boxes provided. Unless the problem states otherwise, assume annual compounding of interest. 1. You currently have a balance of $200,000 in your retirement account. You expect to contribute $7,500 to your retirement account at the end of each year for the next 30 years and your employer will match your contributions; thus, the annual end-of-year contributions to your retirement account will be $15,000. If you earn 8% on your retirement account, how much money will you have in your account when you retire in 30 years? $ 2. You have a 4-year-old daughter and want to have $120,000 in her college fund when she starts college. You expect to earn a 7% return on her college-fund investments. If you want to make 14 equal-sized end-of-year deposits into your daughter’s college fund, how much do you need to deposit each year to have…
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