Question
1.Randy Owen invested $9,000 at 5% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end
1.Randy Owen invested $9,000 at 5% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Randy withdrew the accumulated amount of money.What amount did Randy withdraw, assuming the investment earns simple interest?What amount did Randy withdraw, assuming the investment earns interest compounded annually?
4.Bates Company issued $1,400,000, 12-year bonds and agreed to make annual sinking fund deposits of $78,000. The deposits are made at the end of each year into an account paying 6% annual interest.What amount will be in the sinking fund at the end of 12 years?
5.Frank and Maureen Fantazzi invested $5,000 in a savings account paying 5% annual interest when their daughter, Angela, was born. They also deposited $1,000 on each of her birthdays until she was 18 (including her 18th birthday). How much was in the savings account on her 18th birthday (after the last deposit)?
10.Lloyd Company earns 6% on an investment that will return $450,000, 8 years from now. What is the amount Lloyd should invest now to earn this rate of return?
11.Arthur Company is considering investing in an annuity contract that will return $46,000 annually at the end of each year for 15 years. What amount should Arthur Company pay for this investment if it earns an 8% return?
12.Kaehler Enterprises earns 5% on an investment that pays back $80,000 at the end of each of the next 6 years. What is the amount Kaehler Enterprises invested to earn the 5% rate of return?
17.Mark Barton owns a garage and is contemplating purchasing a tire retreading machine for $18,000. After estimating costs and revenues, Mark projects a net cash flow from the retreading machine of $3,200 annually for 8 years. Mark hopes to earn a return of 9% on such investments. What is the present value of the retreading operation?
19.Leffler Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1, $40,000; Year 2, $45,000; and Year 3, $50,000. Leffler requires a minimum rate of return of 8%.What is the maximum price Leffler should pay for this equipment?
20.If Colleen Mooney invests $4,765.50 now and she will receive $12,000 at the end of 12 years, what annual rate of interest will Colleen earn on her investment?
21.Wayne Kurt has been offered the opportunity of investing $29,319 now. The investment will earn 11% per year and at the end of that time will return Wayne $75,000. How many years must Wayne wait to receive $75,000?
22.Joanne Quick made an investment of $10,271.38. From this investment, she will receive $1,200 annually for the next 15 years starting one year from now. What rate of interest will Joannes investment be earning for her?
23.Patty Schleis invests $6,542.83 now for a series of $1,300 annual returns beginning one year from now. Patty will earn a return of 9% on the initial investment. How many annual payments of $1,300 will Patty receive?
25.Ramos Company is considering purchasing equipment. The equipment will produce the following cash flows: Year 1, $20,000; Year 2, $30,000; Year 3, $40,000. Ramos requires a minimum rate of return of 11%. What is the maximum price Ramos should pay for this equipment?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started