Question
1) On January 1, a company agrees to pay $16,000 in nine years. If the annual interest rate is 8%, determine how much cash the
1) On January 1, a company agrees to pay $16,000 in nine years. If the annual interest rate is 8%, determine how much cash the company can borrow with this agreement. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)
Future Value x Table Factor = Amount Borrowed
2) Tom Thompson expects to invest $14,000 at 6% and, at the end of a certain period, receive $29,861. How many years will it be before Thompson receives the payment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)
Future Value / Present Value = Table Factor Years
3) Mark Welsch deposits $7,200 in an account that earns interest at an annual rate of 12%, compounded quarterly. The $7,200 plus earned interest must remain in the account 5 years before it can be withdrawn. How much money will be in the account at the end of 5 years? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)
Present Value x Table Factor = Total Accumulation
4) Spiller Corp. plans to issue 6%, 9-year, $520,000 par value bonds payable that pay interest semiannually on June 30 and December 31. The bonds are dated December 31, 2019, and are issued on that date. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "Table value" to 4 decimal places and final answers to nearest whole dollar.) If the market rate of interest for the bonds is 4% on the date of issue, what will be the total cash proceeds from the bond issue?
Table Values are Based on: | |||
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Cash Flow | Table Value | Amount | Present Value |
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Interest (annuity) |
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Total cash proceeds |
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