Exam 26: Present and Future Values in Accounting

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of ^$1) (Use appropriate factor(s) from the tables provided.)

(True/False)

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Question 41

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

(True/False)

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Question 42

If we want to know the value of present-day assets at a future date, we can use:

(Multiple Choice)

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Question 43

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (^PV^of^$1, ^FV^of^$1, ^PVA^of ^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 44

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

(Short Answer)

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Question 45

A series of equal payments made or received at the end of each period is an ordinary annuity.

(True/False)

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Question 46

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years. This transaction includes interest at 8%, compounded semiannually. What is the value of the machine today?

(Short Answer)

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Question 47

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(True/False)

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Question 48

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 49

A company expects to invest $5,000 today at 12% annual interest and plans to receive $15,529 at the end of the investment period. How many years will elapse before the company accumulates the $15,529? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 50

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(True/False)

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Question 51

Paul wants to invest a sum of money today that will accumulate to $50,000 at the end of 4 years. Assuming he can earn an interest rate of 8% compounded semiannually, how much must he invest today? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 52

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 53

The Masterson family is setting up a vacation fund, and they plan on depositing $1,000 per quarter in an investment that will pay 12% annual interest. What amount will they have available for their vacation at the end of 2 years? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 54

Explain the concept of the future value of an annuity.

(Essay)

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Question 55

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(Multiple Choice)

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Question 56

When you reach retirement age, you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702. The fund will earn 6% per year. For how many years will you be able to draw an even amount of $14,702?

(Short Answer)

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Question 57

The interest rate is also called the ________ rate.

(Short Answer)

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Question 58

Explain the concept of the present value of a single amount.

(Essay)

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Question 59

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

(True/False)

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Question 60

Showing 41 - 60 of 84

Exam 26: Present and Future Values in Accounting

With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

The present value of an annuity table can be used to determine the value today of a series of payments to be received in the future.

If we want to know the value of present-day assets at a future date, we can use:

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

A company is creating a fund today by depositing $65,763. The fund will grow to $90,000 after 8 years. What annual interest rate is the company earning on the fund?

A series of equal payments made or received at the end of each period is an ordinary annuity.

Mason Company has acquired a machine from a dealer that requires a payment of $45,000 at the end of five years. This transaction includes interest at 8%, compounded semiannually. What is the value of the machine today?

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Paul wants to invest a sum of money today that will accumulate to $50,000 at the end of 4 years. Assuming he can earn an interest rate of 8% compounded semiannually, how much must he invest today? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Explain the concept of the future value of an annuity.

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

When you reach retirement age, you will have one fund of $100,000 from which you are going to make annual withdrawals of $14,702. The fund will earn 6% per year. For how many years will you be able to draw an even amount of $14,702?

The interest rate is also called the ________ rate.

Explain the concept of the present value of a single amount.

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)

Accounting in Business

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Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

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With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the end of the sixth year if the annual rate of interest is 10%. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of ^$1) (Use appropriate factor(s) from the tables provided.)

Jason has a loan that requires a single payment of $4,000 at the end of 3 years. The loan's interest rate is 6%, compounded semiannually. How much did Jason borrow? (^PV^of^$1, ^FV^of^$1, ^PVA^of ^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.40. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Molly borrows money by promising to make a single payment of $100,000 at the end of 5 years. How much money is Molly able to borrow if the interest rate is 10%, compounded semiannually? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

The present value of eight $5,000 semiannual payments invested for 4 years at 8% compounded semiannually is $33,663.50. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

Hao made a single investment which, after 5 years invested at 12% compounded semiannually, has accumulated to $214,900. How much did Hao invest initially? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

What amount can you borrow if you make six quarterly payments of $4,000 at a 12% annual rate of interest? (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)

At an annual interest rate of 8% compounded annually, $5,300 will accumulate to a total of $7,210.65 in 5 years. (^PV^of^$1, ^FV^of^$1, ^PVA^of^$1, and ^FVA^of^$1) (Use appropriate factor(s) from the tables provided.)