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25 February, 13:11

For each of these situations, determine the savings amount. Use the time value of money tables inChapter 1 (Exhibit 1-3) or in the Chapter 1 appendix. (LO 4.3) a. What would be the value of a savings account started with $700, earning 4 percent (compounded annually) after 10 years? b. Brenda Young desires to have $15,000 eight years from now for her daughter's college fund. If she will earn 6 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation. c. What amount would you have if you deposited $1,800 a year for 30 years at 8 percent (compounded annually) ?

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  1. 25 February, 14:36
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    a. What would be the value of a savings account started with $700, earning 4 percent (compounded annually) after 10 years?

    $700 * 1.480 = $1,036.00

    b. Brenda Young desires to have $15,000 eight years from now for her daughter's college fund. If she will earn 6 percent (compounded annually) on her money, what amount should she deposit now? Use the present value of a single amount calculation.

    $15,000 * 0.627 = $9,405

    c. What amount would you have if you deposited $1,800 a year for 30 years at 8 percent (compounded annually) ?

    $1,800 * 113.28 = $203,904
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