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ACCT251E6-15Sol

# ACCT251E6-15Sol - FV = 0 1 2 8 9 FV = \$300,000(FVF 9 6 =...

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EXERCISE 6-15 (15–20 minutes) (a) i = 6% PV = \$1,000,000 FV = \$1,898,000 0 1 2 n = ? FVF( n, 8% ) = \$1,898,000 ÷ \$1,000,000 = 1.898 reading down the 6% column, 1.898 corresponds to 11 periods. (b) By setting aside \$300,000 now, Lee can gradually build the fund to an amount to establish the foundation. PV = \$300,000

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Unformatted text preview: FV = ? 0 1 2 8 9 FV = \$300,000 (FVF 9, 6% ) = \$300,000 (1.68948) = \$506,844—Thus, the amount needed from the annuity: \$1,898,000 – \$506,844 = \$1,391,156. \$? \$? \$? FV = \$1,391,156 0 1 2 8 9 Payments = FV ÷ (FV – OA 9, 6% ) = \$1,391,156 ÷ 11.49132 = \$121,061.46....
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