Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5% interest. How much will this amount to in 6 months? Mike's savings will amount to $ in 6 months. (Round to the nearest cent as needed.)

Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5% interest. How much will this amount to in 6 months? Mike's savings will amount to $ in 6 months. (Round to the nearest cent as needed.)

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 4MC: Refer to the present value table information on the previous page. What amount should Brett have in...

See similar textbooks

Related questions

Q: deal on the FX spot market and one

A: Foex trading is selling and purchase of currencies between the client or may be through banks or may…

Q: What is the present value of the asset being leased? Recommendation: Your Answer: Answer draw a…

A: Let us calculate the present value as given. Present Value =$30000×1-1(1+7%)57%×(1+7%) +…

Q: Determine the taxable income for a company that had a gross income of $38 million, earnings before…

A: The taxable income of the company on which the income tax will be levied upon. The taxable income is…

Q: This question is about futures risk premia. Consider a two period economy.You can buy stocks in…

A: The expected return on this trading strategy would be equal to the risk-free rate, as the investment…

Q: What amount three years ago is equivalent to $4800 on a date 1_ 1 2 years from now if money earns 3%…

A: Interest is the charge received for the time period in which amount is invested or saved. It can be…

Q: Tom is going to borrow $20000 at an interest rate of 5.25% p.a. calculated quarterly. Tom will make…

A: The interest rate that has been compounded over a certain period is the effective annual interest…

Q: On his thirteenth birthday, a boy inherits $13,000 which is to be used for his college education.…

A: Return In its most basic form, a return—also referred to as a financial return—is the amount of…

Q: Waterway Industries is considering purchasing equipment. The equipment will produce the following…

Q: What rate compounded monthly will yield the effective rate 19.75%?

A: Effective annual interest rate (EAR) refers to the real rate of return that we earn on our savings…

Q: Compute the interest rate if future value (FV) = $8011, present value (FV) = $2685, and number of…

A: Time value of money concept says that a dollar amount invested today will have more value in future…

Q: What statutory protection is offered to a third party who enters into a contract with a person…

A: A third party who enters into a contract with a person purporting to act on behalf of a company…

Q: Investment X offers to pay you $4,700 per year for 9 years, whereas Investment Y offers to pay you…

A: Net Present Value - It is the difference between the present value of cash outflow and present…

Q: Jack Frat Burger Shack reported 2022 net income of $11 million and depreciation of $3,500,000. The…

A: STEP 1 The portion of a company's cash flow statement titled "cash flow from operations" shows how…

Q: Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a…

A: Delta-hedging involves adjusting the number of shares held in the portfolio to offset changes in the…

Q: The book value for year 2, (in $) Round to the nearest two (2) decimal places Add your answer

A: In a double declining balance depreciation, the depreciation rate will be accelerated and be applied…

Q: 4.StockA sells for $40 a share. Its likely dividend payout and end-of-year price depend on the state…

Q: The risk management of Societe General took measures to close a trader's open position within three…

A: The risk management of Societe General took measures to close a trader's open position within three…

Q: ( ² ), ^² = ( ² ). 12 3 respectively, does the price of an asset with returns Consider two assets:…

A: The no-arbitrage property states that the price of an asset must be equal to the expected value of…

Q: Emphasis Plc. is facing a project with a known present value of abandonment £3000, but expected…

A: An abandonment project refers to a situation where a company decides to stop work on a project that…

Q: Suppose investors can earn a return of 4.5% per 6 months on a Treasury note with 6 months remaining…

A: STEP 1 T-Bills are investment instruments that enable investors to make loans to the government. The…

Q: Investor has had the following returns in the Magic Fund for the past 4 years: 15%, 25%, -30%, 18%.…

A: As per the calculations, the annual arithmetic return is higher and the annual geometric return is…

Q: You own 1,000 shares of stock in Avondale Corporation. You will receive a $3.45 per share dividend…

A: Any stock's market value indicates the current worth of all the expected cash flows from the stock.…

Q: You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 33-year…

Q: A debtor borrows P7,900 and agrees to pay P9,359 for his debt 3 years & 4 months from now. At what…

A: The present value (P) is P7,900. The future value (FV) is P9,359. The period is 3 years 4 months…

Q: A two-year Treasury bill offers a 5.1% yield to maturity. The market's concensus forecast is that…

A: We have to find the yield for one year maturity using Expectation Hypothesis theory. This theory…

Q: Ramona Garcia will be remodeling her kitchen before she places her home on the market to sell. She…

A: Monthly payments refer to the payment that is paid on a monthly basis for the repayment of the…

Q: In a Treasury auction of Rs 2,500 million par value 91-day T-bills, the following bids were…

A: The Treasury will conduct the bidding process for T-bills in descending order of price, meaning that…

Q: What is the IRR of the following set of cash flows? (Do not round intermediate calculations and…

A: Any project/investment's profitability and feasibility are accessed via a process recognized as…

Q: Which is the better investment decision: to place money in time deposit earning 5% compounded…

A: Interest rate refers to the rate at which the investment is expected to grow in its value and…

Q: Find the payment necessary to amortize a 12% loan of $2300 compounded quarterly, with 12 quarterly…

A: PMT stands for "payment." In finance and accounting, PMT refers to a fixed payment amount made by a…

Q: mtio Calculations Select the images below to enlarge. Balance Sheet Murawski Company Balance Sheet…

A: The current ratio represents the ratio between current assets and current liabilities of company and…

Q: Inland Fisheries Corp. anticipates cash flows from operating activities of $10 million in 20XX. It…

A: Free cash flow (FCF) represents the funds available for a corporation to use for debt repayment,…

Q: Higuel owes $650 in 3 years and $1500 in 8 years. However, Miguel is unable to meet his $650…

A: In case of simple interest, the interest amount is charged only on the principal amount. This is…

Q: Suppose an investor shorts a straddle (a call option + a put option with the same strike price) with…

A: We can use the Black-Scholes formula to calculate the theoretical values of the call and put options…

Q: The cc risk free rate is 2.75%. The spot price of TFS is 33.25 and TFS pays a cc dividend of 1.0%.…

A: c. Short 1 share of stock, long C32.5, short P32.55.

Q: nted dividend rn remains a

A: According DDM Price of Share = D /(K-g), for the same year. Where g have to find for the year, Or…

Q: ou are considering an investment that will pay you $1,200 in two year, $2,400 in three years and…

A: Price of the investment is the PV of all its future income. We need to discount each cash outflow to…

Q: The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M.…

A: STEP 1 NPV The computation of the net present value per share of all future cash flows associated…

Q: Use the formule for continuous compounding to compute the balance in the account after 1, 5, and 20…

A: Given, P = $17,000 APR = 4.5% =4.5/100 = 0.045 For continuous compounding, The amount will be, A =…

Q: The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating…

A: Given Operating Income EBIT(Earning Before Interest and Taxes)= $ 20000000 Add Indirect Income…

Q: A transportation company is considering adding new busses for its transit system. The total cost of…

A: Fair price per trip depends on the cost of purchase of Bus and cost of finance of Bus and also other…

Q: No. 2: La Pizza della Nonna Corporation, S.A. It is in the process of selling shares in the Roman…

A: a) The weighted cost of capital according to the risk premium approach methodology is calculated as…

Q: Last year, Crystal Rock Holdings reported $510,000 of sales, $262,500 of operating costs other than…

A: The times-interest-earned ratio is a financial ratio that represents the ability of a company to…

Q: Question 2 A father deposited unknown lump-sum amounts into an investment opportunity per year…

A: The concept of money's time value indicates that any sum of money currently is worth more as…

Q: a. Explain forecasting exchange rates. b. Explain four forecasting techniques.

A: STEP 1 When forecasting exchange rates, analytical principles are used to calculate future rates.…

Q: a) First, ignore the fact that rrf depends on whether you are long or short the risk-free asset.…

A: a) The tangency portfolio is the portfolio that lies on the efficient frontier and is tangent to the…

Q: MagnusBane International Plc, a listed company operating in the entertainment sector, has a current…

A: (a) i. Calculation of Straight Debt Value: The straight debt value can be calculated by discounting…

Q: Valero Energy's balance sheet showed total current assets of $3,000, all of which were required in…

A: Net operating working capital is the difference between a company's current assets (excluding cash…

Q: Estimate what happens to the value of the delta and gamma neutral portfolio when there is a shock to…

A: The financial institution has a portfolio of over-the-counter derivatives on pounds sterling which…

Q: The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M.…

A: Net Present Value A set of cash flows is said to have a net present value or net present worth if…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

Mike Branson invested his summer earnings of $6000 in a savings account for college. The account pays 2.5%
interest. How much will this amount to in 6 months?
Mike's savings will amount to $ in 6 months.
(Round to the nearest cent as needed.)

Expert Solution

Step 1

Future Value refers to the value of the current asset or investment or of cash flows at a specified interest rate for a specified period of time at some specified future date. It is an important concept of the time value of money which is very useful for everyone especially for investors as they can evaluate the worth of their investments or securities in the future and accordingly can take the decision of whether to invest or not.

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Refer to the present value table information on the previous page. What amount should Brett have in his bank account today, before withdrawal, if he needs 2,000 each year for 4 years, with the first withdrawal to be made today and each subsequent withdrawal at 1-year intervals? (Brett is to have exactly a zero balance in his bank account after the fourth withdrawal.) a. 2,000 + (2,000 0.926) + (2,000 0. 857) + (2,000 0.794) b. 2,0000.7354 c. (2,000 0.926) + (2,000 0.857) + (2,000 0.794) + (2,000 0.735) d. 2,0000.9264
You opened a savings yesterday by depositing $10,000. You would like to be able to withdraw $2,000 per year for each of the next 4 years of college and still have $3,000 left in the account when you graduate. What interest rate does this account need to earn?
A man wants to set up a 529 college savings account for his granddaughter. How much would he need to deposit each year into the account in order to have $80,000 saved up for when she goes to college in 15 years, assuming the account earns a 8% annual return. Annual deposit:
Tom hopes to earn $600 in Interest in 4.3 years time from $60,000 that he has available to Invest. To decide if it's feasible to do this by Investing in an account that compounds annually, he needs to determine the annual Interest rate such an account would have to offer for him to meet his goal. What would the annual rate of interest have to be? Round to two decimal places. Answer How to enter your answer (opens in new window) % Interest formul Keyp Keyboard Short Dec 18 8:35 O
George borrows $43,000 to buy a car. He will repay the loan through 4 years of equal monthly payments and an annualized interest rate of 3.9%. Think about payment #44 of the loan obligation. How much of this payment will be interest? Enter your answer as a positive number (in dollars), and round to the nearest dollar.
Ed wants to have $10, 000 in 5 years. He opens a savings account in a bank which pays 7.2% interest compounded monthly. He can either deposit a single lump sum or schedule monthly deposits. Find the amount Ed has to deposit as a single lump sum and the total interest earned. Find the amount of each monthly deposit Ed has to make and the total interest earned.
Joe opens an investment account with an initial deposit of $200. He then sets up monthly deposits of $50 to the account. If the account earns 5.25% interest compounded monthly, how much money will he have in the account in 6 years?
Can you please help me work out this problem in detail? Tony Ring wants to attend Northeast College. He will need $60,000 4 years from today. Assume Tony’s bank pays 6% interest compounded semiannually. What must he deposit today so he will have $60,000 in 4 years?
William borrows $22,000 to buy a car. He will repay the loan through 4 years of equal monthly payments and an annualized interest rate of 4.3%. Think about payment #32 of the loan obligation. How much of this payment will be principal? Enter your answer as a positive number (in dollars), and round to the nearest dollar.
Rodney would like to save $57,000 over the next 15 years. How much must he deposit at the beginning of each month into his savings account if the account earns j12-4.8%? Your Answer: Answer
Troy Long wishes to deposit a single sum of money into a savings account so that five equal annual withdrawals of $2000 can be made before depleting the funds. If the first withdrawal is made in year 1 after the deposit and if the bank provides an interest rate of 5% per year, how much money should be deposited now? What if Troy decides to withdraw all that he has deposited in the bank now, 5 years later, how much money should he expect to get with an interest rate of 5%? Draw the cash flow diagram. 2.
Juan decided to start saving for college. He deposited $500 into an account that earns 4% simple annual interest. At the end of each year, he will add $250 to this account. How much will he have in his account after the end of three years? a $550 b $770 c $1,050.80 d $1,342.83