Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter M, Problem 2MC
To determine
Determine the amount of cash that would be available in the savings account 2 years from today.
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Question:
Use the following information to answer the next two questions:
You deposited the following stream of cash flow at the end of the year:
Year deposit rate of interest 1 5000 8%
4 4000 8.5%
6 7000 10%
What will be the total amount in your account at the end of 6 years?
2. What is the present value of your deposit?
If $100 is deposited in a bank with an interest rate of 8%, and the same amount of money is taken out each year for other investments, what is the cash flow each year? $100 $108 $8 $92
Table 1 shows deposit into saving account with rate of return 10% per year.
Determine the future value at year 20.
Table 1: Deposit Money into Saving Account Information
Year
1
2
2,000
3
5
6.
Deposit, RM per year
800
2,000
2,000
1,800
1,600
1,400
Chapter M Solutions
Intermediate Accounting: Reporting And Analysis
Ch. M - Explain interest.Ch. M - Prob. 2GICh. M - Prob. 3GICh. M - Prob. 4GICh. M - Prob. 5GICh. M - Prob. 6GICh. M - Prob. 7GICh. M - Prob. 8GICh. M - Prob. 9GICh. M - Prob. 10GI
Ch. M - Prob. 11GICh. M - Prob. 12GICh. M - Prob. 13GICh. M - Prob. 14GICh. M - Prob. 15GICh. M - Prob. 16GICh. M - Prob. 17GICh. M - Prob. 18GICh. M - Prob. 19GICh. M - Prob. 20GICh. M - Prob. 21GICh. M - Prob. 22GICh. M - What is a deferred ordinary annuity? How does it...Ch. M - Prob. 24GICh. M - Prob. 25GICh. M - Give two examples of assets and three examples of...Ch. M - Prob. 1MCCh. M - Prob. 2MCCh. M - Refer to the present value table information on...Ch. M - Refer to the present value table information on...Ch. M - On May 1, 2019, a company purchased a new machine...Ch. M - An office equipment representative has a machine...Ch. M - Prob. 7MCCh. M - For which of the following transactions would the...Ch. M - On July 1, 2019, James Rago signed an agreement to...Ch. M - On January 1, 2019, Ken Company sold a machine to...Ch. M - Prob. 1RECh. M - Based on the following annual interest rates, what...Ch. M - Prob. 3RECh. M - Prob. 4RECh. M - Next Level Potter wishes to deposit a sum that at...Ch. M - Prob. 6RECh. M - Prob. 7RECh. M - Prob. 8RECh. M - Prob. 9RECh. M - If 90,000 is invested in a fund on December 31,...Ch. M - Samuel Ames owes 20,000 to a friend. He wants to...Ch. M - Prob. 12RECh. M - Prob. 13RECh. M - Prob. 14RECh. M - Prob. 1ECh. M - Future Value Hugh Colson deposited 20,000 in a...Ch. M - Prob. 3ECh. M - Future Value of Annuity Using appropriate tables,...Ch. M - Prob. 5ECh. M - Prob. 6ECh. M - Prob. 7ECh. M - Cash Flow Amounts R. Lee Rouse borrows 10,000 that...Ch. M - Prob. 9ECh. M - Amount of an Annuity John Goodheart wishes to...Ch. M - Prob. 11ECh. M - Prob. 12ECh. M - Present Value of Leased Asset On January 1, 2019,...Ch. M - Amount of an Annuity Beginning December 31, 2023,...Ch. M - Prob. 1PCh. M - Prob. 2PCh. M - Prob. 3PCh. M - Determining Loan Repayments Jerry Rockness needs...Ch. M - Prob. 5PCh. M - Prob. 6PCh. M - Value of an Annuity Using the appropriate tables,...Ch. M - Serial Installments; Amounts Applicable to...Ch. M - Prob. 9PCh. M - Comprehensive Part a. Reproduced in the following...Ch. M - Prob. 11PCh. M - Present Value of an Annuity John Joshua wants to...Ch. M - Present Value of an Annuity Ralph Benke wants to...Ch. M - Compound Interest Issues You are given the...Ch. M - Cash Flow Amounts On January 1, 2019, Philip...Ch. M - Prob. 16PCh. M - Comprehensive The following are three independent...Ch. M - Prob. 18PCh. M - Asset Purchase Price BWP Inc. is considering the...Ch. M - Prob. 1CCh. M - Prob. 2CCh. M - Prob. 3CCh. M - Prob. 4CCh. M - Prob. 5C
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- Refer to the present value table information on the previous page. If Kathleen put 3,000 in a savings account today, what amount of cash will be available 2 years from today? a. 3,000 0.857 b. 3,000 0.857 2 3,000 c. 4,000 0.681 0926 d. cannot be determined from the information givenarrow_forwardYou put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.arrow_forwardUsing ume value of money tables, calculate the following. (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C., Exhibit 1-D) Note: Use approprlate factor(s) from the tables provided. a. The future value of $490 six years from now at 5 percent. b. The future value of $600 saved each year for 10 years at 7 percent c. The amount a person would have to deposit today (present value) at an interest rate of 7 percent to have $900 five years from now. d. The amount a person would have to deposit today to be able to take out $600 a year for 10 years from an account earning 9 percent. Complete this question by entering your answers in the tabs below. The future value of $600 saved each year for 10 years at? percent. Noter Round time value factor to 3 decimal place and finafapswes to 2 decimal places.arrow_forward
- You will deposit money into a bank account according to the following schedulet today year from today $225,000 $53,500 years from today years from today $49,750 4 $21,200 years from today $112,050 After 6 years from today, what will be the purchasing power of the money in your bank account, expressed in today's dollars? Your bank pays interest at 2.5000% compounded yearly and inflation is expected to be 1.1250% per year.arrow_forward12. You put $250 in the bank for 5 years at 12%. Using the Future Value of 1 Table, what factor would you use to calculate the future value of your deposit? Enter the factor as seen in the table, with five decimal places. 13. You put $8,195 in the bank for 6 years at 7%. Using the Future Value of 1 Table (Time and Value Table), what factor would you use to calculate the future value of your deposit? Round to four decimal places.arrow_forwardTime Value of Money Concept The following situations involve the application of the time value of money concept. Use the full factor when calculating your results. Use the appropriate present or future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1 1. Janelle Carter deposited $9,960 in the bank on January 1, 2000, at an interest rate of 12% compounded annually. How much has accumulated in the account by January 1, 2017? Round to the nearest whole dollar.$fill in the blank 1 2. Mike Smith deposited $22,360 in the bank on January 1, 2007. On January 2, 2017, this deposit has accumulated to $69,447. Interest is compounded annually on the account. What rate of interest did Mike earn on the deposit? Round to the nearest whole percent.fill in the blank 2 % 3. Lee Spony made a deposit in the bank on January 1, 2010. The bank pays interest at the rate of 12% compounded annually. On January 1, 2017, the deposit has accumulated to $14,200. How much money did Lee…arrow_forward
- You plan to borrow $1000 from a bank. In exchange fro $1000 today, you promise to pay $1080 in one year. What does the cash flow timeline look like from your perspective? What does it look like from the bank's perspective?arrow_forwardYou will deposit money into a bank account according to the following schedule: today $425,000 1 year from today $55,000 11 years from today $56,500 17 years from today $22,000 $124,300 19 years from today After 19 years from today, what will be the purchasing power of the money in your bank account, expressed in today's dollars? Your bank pays interest at 4.0000% compounded yearly and inflation is expected to be 3.5000% per year.arrow_forwardYou have been depositing money into an account yearly based on the following investment amounts, rates and times, what is the value of that investment account at the end of that period? (Click here to see present value and future value tables) Amounts ofInvestment Rate Times Value at the Endof the Period $9,000 20% 16 years $fill in the blank 1 $13,000 15% 11 years $fill in the blank 2 $16,000 12% 6 years $fill in the blank 3 $35,000 10% 4 years $fill in the blank 4arrow_forward
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