# ACC240 Ch23Answer key, 2010 - Could you not take the...

This preview shows page 1. Sign up to view the full content.

ACC240 Ch. 23 Answer Keys PV-FV QUIZ ANSWERS 1. \$5,000 X 5.5256 = \$27,628 +\$10,000 X 1.2763 = \$12,763 \$40,391 2. \$3,000,000/20 = \$150,000 \$150,000 X 13.5903 = \$2,038,545 3. \$2,600 X 30.8402 = \$80,184 4a. \$2,600 X 259.0565 = \$673,546 4b. \$5,200 X 45.7620 = \$237,962 5. \$125,000/5.8666 = \$21,307 Read this problem carefully. What you will discover is that I am asking you to work this problem backwards. We can look at number 5 on the page for an example. In number 5 I ask how much will \$1,000 per year be worth in 17 yrs assuming 8%. The answer we found to be {\$1,000 X 33.7502= \$33,750} Now look at the calculation and imagine me giving you the \$33,750 as the amount I want in 17 years and I ask you to figure out the amount I would have to invest for 17 yrs at 8%.
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Could you not take the \$33,750, go to the table and find 33.7502 and then divide to get your answer? Well if you have not seen it yet, the answer is YES; I can work backwards to get the \$1,000 by {\$33,750/33.7502} So go back to #10. Go to the FV annuity table. Why? Because if you were working it forwards as in #5, we would use the FV annuity table. We therefore must use the same table working it backwards. You find 7.3359. We can now {\$60,000/7.3359} to get \$8,179 (#10) This is actually two problems in one. We must first calculate what the annuity will grow to. We must then calculate a lump sum problem. a. \$3,000 X 15.9374 = \$47,812 (FV annuity table) b. \$47,812 X 17.449 = \$834,275...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online