Carol charged her credit card 10,000 dollars on December 31, 2011. The monthly interest rate charged...
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Carol charged her credit card 10,000 dollars on December 31, 2011. The monthly interest rate charged by the credit card company is 1% of the unpaid balance at the end of each month. Carol wishes to pay off all her debt in three years, with 36 equal payments, at the beginning of each month, beginning February 1, 2012. What should the amount of her monthly payments be? EXERCISE 3.3 1. Calculate the future value of an annuity of 10,000 dollars each year for 10 years, at 6% annual rate. The payments are paid at the beginning of each year, and the future value is calculated as of the end of the tenth year. Your answer should be the same as the answer of Fig. 2.3.3, Chapter 2, although the approach was different. I 2. Calculate the future value of an annuity of $500 each month for thirty years, earning a rate of 6% per annum (i.e., a 0.5% monthly rate). The payments are at the beginning of each month and the future value will be paid back at the end of thirtieth year. 1 Year 1 2 10000 3 14 5 16 7 8 9 10 ANN-T-NUD KG A 1 year 1 2 3 6 B Year 2 7 A2 1.06 10000 Year4 Year 3 Year 5 Year 6 -82 106-C2 106-D2 106-E2 1.06 -B3 1.06 C3 1.06-03 1.06 E3 1.06 -C4 1.06-04 1.06 E4 1.06 10000 10000 =D5 1,06 =E5 1.06 05-106 10000 =E61.06 10000 B year 2 Figure 2.3.3 10600 10000 C year 3 D year 4 1123611910 10600 11236 10000 10600 10000 year's 12625 11910 11236 10600 10000 H Year 7 Year 10 Year 8 Year 9 -G2 1.06 -H2 1.06 -12 1.06 -F2 1.06 HIBIR -F3 1.06 -G3 1.06 -H3 1.06-13 1.06 F4 1.06 -G4 1.06H4 1.06-14 1.06 -F51.06 -G5 1.06 -H5 1.06-15 1.06 - F6 1.06 -G6 1.06 =H6 1.06 =16*1.06 =F7*1.06 -G7*1.06 H7*1.06 17*1.06 10000 -G8*1.06 =H8*1.06 =18*1.06 10000 =H9 1.06-19 1.06 10000 110 1.05 year 6 13382 12625 11910 11236 G year 7 14185 13382 12625 H year B 55036 14185 13382 12625 11910 11236 30600 10000 Sum year 9 15938 15036 14185 11236 10600 10000 13387 11910 11236 12625 10000 10600 11910 K Year 11 12 1.06 -J3*1.06 14 1.06 -15*1.06 =16*1.06 =17*1.06 -18*1.06 19 1.06 110 1.06 -04 J1L 1.06 SUM(K2:K11) K year 10 year 11 1689517908 15938 16895 15036 15938 14185 15036 13382 14185 12625 13382 11910 12625 11236 11910 10600 11236 10000 10600 139716 Carol charged her credit card 10,000 dollars on December 31, 2011. The monthly interest rate charged by the credit card company is 1% of the unpaid balance at the end of each month. Carol wishes to pay off all her debt in three years, with 36 equal payments, at the beginning of each month, beginning February 1, 2012. What should the amount of her monthly payments be? EXERCISE 3.3 1. Calculate the future value of an annuity of 10,000 dollars each year for 10 years, at 6% annual rate. The payments are paid at the beginning of each year, and the future value is calculated as of the end of the tenth year. Your answer should be the same as the answer of Fig. 2.3.3, Chapter 2, although the approach was different. I 2. Calculate the future value of an annuity of $500 each month for thirty years, earning a rate of 6% per annum (i.e., a 0.5% monthly rate). The payments are at the beginning of each month and the future value will be paid back at the end of thirtieth year. 1 Year 1 2 10000 3 14 5 16 7 8 9 10 ANN-T-NUD KG A 1 year 1 2 3 6 B Year 2 7 A2 1.06 10000 Year4 Year 3 Year 5 Year 6 -82 106-C2 106-D2 106-E2 1.06 -B3 1.06 C3 1.06-03 1.06 E3 1.06 -C4 1.06-04 1.06 E4 1.06 10000 10000 =D5 1,06 =E5 1.06 05-106 10000 =E61.06 10000 B year 2 Figure 2.3.3 10600 10000 C year 3 D year 4 1123611910 10600 11236 10000 10600 10000 year's 12625 11910 11236 10600 10000 H Year 7 Year 10 Year 8 Year 9 -G2 1.06 -H2 1.06 -12 1.06 -F2 1.06 HIBIR -F3 1.06 -G3 1.06 -H3 1.06-13 1.06 F4 1.06 -G4 1.06H4 1.06-14 1.06 -F51.06 -G5 1.06 -H5 1.06-15 1.06 - F6 1.06 -G6 1.06 =H6 1.06 =16*1.06 =F7*1.06 -G7*1.06 H7*1.06 17*1.06 10000 -G8*1.06 =H8*1.06 =18*1.06 10000 =H9 1.06-19 1.06 10000 110 1.05 year 6 13382 12625 11910 11236 G year 7 14185 13382 12625 H year B 55036 14185 13382 12625 11910 11236 30600 10000 Sum year 9 15938 15036 14185 11236 10600 10000 13387 11910 11236 12625 10000 10600 11910 K Year 11 12 1.06 -J3*1.06 14 1.06 -15*1.06 =16*1.06 =17*1.06 -18*1.06 19 1.06 110 1.06 -04 J1L 1.06 SUM(K2:K11) K year 10 year 11 1689517908 15938 16895 15036 15938 14185 15036 13382 14185 12625 13382 11910 12625 11236 11910 10600 11236 10000 10600 139716
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Management Accounting Information for Decision-Making and Strategy Execution
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Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young
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