ACT_3391_Chp_6_Homework_Solutions

ACT_3391_Chp_6_Homework_Solutions - Intermediate Accounting...

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Intermediate Accounting I Amanda N. Paul, CPA, MBA Troy University
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Chapter 6 EXERCISE 6-1 (a) (b) Rate of Interest Number of Periods 1. a. 9% 9 b. 3% 20 c. 5% 30 2. a. 9% 25 b. 5% 30 c. 3% 28
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EXERCISE 6-3 (a) $7,000 X 1.46933 = $10,285.31 (b) $7,000 X .43393 = $3,037.51 (c) $7,000 X 31.77248 = $222,407.36 (d) $7,000 X 12.46221 = $87,235.47
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EXERCISE 6-6 (a)Future value of $12,000 @ 10% for 10 years ($12,000 X 2.59374) = $31,124.88 (b) Future value of an ordinary annuity of $600,000 at 10% for 15 years ($600,000 X 31.77248) = $19,063,488.00 Deficiency ($20,000,000 – $19,063,488) $936,512.00
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EXERCISE 6-6 continued (c) $70,000 discounted at 8% for 10 years: $70,000 X .46319 = $32,423.30 Accept the bonus of $40,000 now. (Also, consider whether the 8% is an appropriate discount rate since the president can probably earn compound interest at a higher rate without too much additional risk.)
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(a) $50,000 X .31524 = $15,762.00 + $5,000 X 8.55948 = 42,797.40 $58,559.40 (b) $50,000 X .23939
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This note was uploaded on 03/30/2011 for the course ACT 4495 taught by Professor Burks during the Fall '10 term at Troy.

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ACT_3391_Chp_6_Homework_Solutions - Intermediate Accounting...

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