ACC240 Ch23Answer key, 2010

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

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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%.
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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...
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