ABC wants to have $20,000 in a savings account four years from now. What amount must...

ABC wants to have $20,000 in a savings account four years from now. What amount must ABC deposit into an account today if the account will earn 10% interest, and interest is compounded semiannually?

Present Value of $1

Periods	5%	6%	8%	10%
4	0.823	0.792	0.735	0.683
5	0.784	0.747	0.681	0.621
6	0.746	0.705	0.630	0.564
7	0.711	0.665	0.583	0.513
8	0.677	0.627	0.540	0.467
9	0.645	0.592	0.500	0.424
10	0.614	0.558	0.463	0.386

Present Value of Annuity of $1

Periods	5%	6%	8%	10%
4	3.546	3.465	3.312	3.170
5	4.329	4.212	3.993	3.791
6	5.076	4.917	4.623	4.355
7	5.786	5.582	5.206	4.868
8	6.463	6.210	5.747	5.335
9	7.108	6.802	6.247	5.759
10	7.722	7.360	6.710	6.145

		$6,309
		$13,540
		$13,660
		$3,095

Expert Solution

Correct Option D i.e. $3095

Future value = Present value *(PVAF, 5%, 8 Period)
20000 = Present value * 6.463
present value = 20000/6.463
3,095


As we know interest is compounded semiannual but in given table its annually. We need to convert the interest rate
Annual interest rate	10%
Semiannual interest rate	5%	(10/2)

ekkarill92 answered 1 year ago

You deposit into a savings account $4,000 now and $2500 three years from now. Then, the...

You deposit into a savings account $4,000 now and $2500 three years from now. Then, the next year you withdraw $1000 and another $1000 the following year. Then, you get a bonus from your company and deposit $2,000 at the end of year 6, and make no deposits or withdrawals the rest of the planning horizon. The interest rates are 4% during the first two years, then drops to 3% during the following three years, and then to 2% until...

You want to have $42,000 in your savings account 8 years from now, and you're prepared...

You want to have $42,000 in your savings account 8 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.7 percent interest, what amount must you deposit each year? Multiple Choice $7,233.09 $3,991.63 $3,234.01 $5,250.00 $3,233.99

You want to have $51,000 in your savings account 7 years from now, and you're prepared...

You want to have $51,000 in your savings account 7 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.7 percent interest, what amount must you deposit each year? Multiple Choice $5,947.47 $3,416.98 $9,374.98 $3,417.01

You want to have $44,000 in your savings account 4 years from now, and you're prepared...

You want to have $44,000 in your savings account 4 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.7 percent interest, what amount must you deposit each year? Multiple Choice $11,000.00 $12,997.70 $9,807.92 $3,388.03 $3,387.97

You want to have $54,000 in your savings account 5 years from now, and you're prepared...

You want to have $54,000 in your savings account 5 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.3 percent interest, what amount must you deposit each year? Multiple Choice $10,800.00 $3,941.97 $9,334.06 $3,942.02 $13,155.56

Calculating Annuity Values. You want to have $60,000 in your savings account 12 years from now,...

Calculating Annuity Values. You want to have $60,000 in your savings account 12 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 6.4 percent interest, what amount must you deposit each year? Calculating Annuity Values. Your company will generate $47,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 7.1 percent, what is...

An amount of P 250,000 is now deposited into a savings account that earns 12% compounded...

An amount of P 250,000 is now deposited into a savings account that earns 12% compounded continuously for the school requirements of a civil engineering student on the succeeding 5 years from now. If the every year the student will withdraw P 51,651 from this account, how many years would the deposit lasts?

A four-year insurance policy in the amount of $20,000 was purchased two years ago. What is...

A four-year insurance policy in the amount of $20,000 was purchased two years ago. What is the adjusting entry to record insurance expense for the current year? A.) DEBIT: Insurance Expense for $20,000; CREDIT: Prepaid Insurance for $20,000 B.) DEBIT: Insurance Expense for $5,000; CREDIT: Prepaid Insurance for $5,000 C.) DEBIT: Prepaid Insurance for $20,000; CREDIT: Insurance Expense for $20,000 D.) DEBIT: Prepaid Insurance for $5,000; CREDIT: Insurance Expense for $5,000

Determine the amount of money in a savings account at the end of 8 years, given...

Determine the amount of money in a savings account at the end of 8 years, given an initial deposit of $40,000 and a 4 percent annual interest rate when interest is compounded: 1. Annually 2. Semiannually 3. Quarterly

22. Determine the amount of money in a savings account at the end of 3 years,...

22. Determine the amount of money in a savings account at the end of 3 years, given an initial deposit of $4,000 and an annual interest rate of 4 percent when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Future value a. Annually b. Semiannually c. Quarterly 30. Your parents have accumulated a...

Question