Question
On January 1, 2014, Spearfish Company completed the following transactions (use an 6 percent annual interest rate for all transactions): (FV of $1, PV of
| On January 1, 2014, Spearfish Company completed the following transactions (use an 6 percent annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) |
| a. | Deposited $60,000 in a debt retirement fund. Interest will be computed at six-month intervals and added to the fund at those times (i.e., semiannual compounding). (Hint: Think carefully about n and i.) |
| b. | Established a pension retirement fund to be available by the end of year 10 by making ten annual deposits of $230,000 at year-end, starting on December 31, 2014. |
| c. | Deposited $410,000 in a debt retirement fund. Interest will be computed annually and added to the fund at those times. |
2-a.
In transaction (b), what is the amount of the retirement fund at the end of year 10?
| 2-b. | What is the total amount of interest revenue that will be earned? |
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Daniel Short
8th edition
78025559, 978-0078025556
