Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,600 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account? $fill in the blank 1 B. If you place $6,300 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? $fill in the blank 2 C. You invest $7,000 per year for 11 years at 12% interest, how much will you have at the end of 11 years? $fill in the blank 3 D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why? Take the lump sum $740,000 because it is more money.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PA: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Use the present value and future value tables to answer the following questions.

A. If you would like to accumulate $2,600 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account?

$fill in the blank 1

B. If you place $6,300 in a savings account, how much will you have at the end of 7 years with a 12% interest rate?

$fill in the blank 2

C. You invest $7,000 per year for 11 years at 12% interest, how much will you have at the end of 11 years?

$fill in the blank 3

D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?

Take the lump sum $740,000 because it is more money. 

 

 

Use the present value and future value tables to answer the following questions.
A. If you would like to accumulate $2,600 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account?
2$
B. If you place $6,300 in a savings account, how much will you have at the end of 7 years with a 12% interest rate?
C. You invest $7,000 per year for 11 years at 12% interest, how much will you have at the end of 11 years?
2$
D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend
and why?
Take the lump sum $740,000 because it is more money.
Transcribed Image Text:Use the present value and future value tables to answer the following questions. A. If you would like to accumulate $2,600 over the next 5 years when the interest rate is 15%, how much do you need to deposit in the account? 2$ B. If you place $6,300 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $7,000 per year for 11 years at 12% interest, how much will you have at the end of 11 years? 2$ D. You win the lottery and can either receive $740,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why? Take the lump sum $740,000 because it is more money.
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