Full homework october 29

# Full homework october 29 - Financial accounting E9-15 E9-16...

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Financial accounting E9-15; E9-16; E9-17; E9-18; E9-19; E9-20; E9-21; P9-11 E9-15 PV= 50,000 (1.10)^-3 15,000 (5.9713) 37,565 Truck 37,565 Note payable 37,565 Interest expense 3,756.5 Note payable 3,756.5 E9-16 Option 1: Collect \$50,000 today Option 2: receive 10,100 per year for the next seven years Earn 10% on investments 50,000 today or present value of option 2= Year 1 10,100 x .9091 Year 2 10,100 x .8264 Year 3 10,100 x .7513 Year 4 10,100 x .6830 Year 5 10,100 x .6209 Year 6 10,100 x .5963 Year 7 10,100 x .5132 = 49,492 TAKE THE MONEY TODAY! the present value of option 2 is less than option 1 E9-17 You are working with a client who wants to retire in eight years. The client has a savings account with a local bank that pays 9% and she wants to deposit an amount that will prove her with \$900,000 when she reitres. Currently, she has \$200,000 in the account. How much additional money should she deposit now to provide her with \$900,000 when she retires? 200,000 (5.5384) =1,107,680… she doesn’t need to deposit any more money

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## This note was uploaded on 12/01/2009 for the course H ADM 121 at Cornell.

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Full homework october 29 - Financial accounting E9-15 E9-16...

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