Live chat Call back
← The Quantitative ReasoningAccounting unit 3 q11 →

Intermediat Accounting. Custom Intermediat Accounting Essay Writing Service || Intermediat Accounting Essay samples, help

The dilemma of investment is quite indispensable from the view point either for a company or the world as a whole. When the name of investment and savings comes on the screen then the stance of future value and present value automatically comes. The concept of future value can be understand with this fact that, “A dollar earned today has more worth as compared if it is earned after some months.” There are several factors which influence the FV and PV like the prevailing inflation and interest rates of the country. For the first question, the court has to submit $110,000 (11,000*10) now and after 10 years the whole amount will be end provided that the court pays annual money to Joe for the settlement.

Now comes to the second question which pertains to rate of return.

 

Limited time Offer

0
0
days
:
0
0
hours
:
0
0
minutes
:
0
0
seconds
Get 17% OFF

Rate of Return (ROR)

Initial Outlay

 

 

$33,000

Years to Maturity (YTM)

 

 

7

Interest Rate

 

 

7%

Future Value

 

 

?

Fv = PV (1+i)n

Future Value

 

 

$52991

In this scenario the actual YTM was 8 years but we have been asked to calculate the ROR by consider 7 years as YTM. So after 7 years Mary will receive $52991 on her initial investment of $33,000 showing an increase of 61% in just 7 years. Now comes to the next question in which we have to calculate the return after one year and the accumulated number of years in which we will completely net off our appetite of buying a furniture for $10,000.

Rate of Return (ROR)

Initial Outlay

 

 

1,500

Years to Maturity (YTM)

 

 

1

Interest Rate

 

 

6%

Future Value

 

 

?

Fv = PV (1+i)^n

Future Value

 

 

$1590

Table above shows that Joe and Mary will receive $1590 after one year and they have to wait 6.5 years to accumulate the sum of $10,000 to purchase furniture provided that the interest rate is 6%.

Intermediat Accounting. Custom Intermediat Accounting Essay Writing Service || Intermediat Accounting Essay samples, help

Stay Connected

Live Chat Order now
Stay Connected

Related Accounting essays

  1. Accounting unit 3 q11 essay
  2. Accounting Unit 6 q11 essay
  3. Accounting Unit 5 q11 essay
  4. Income Statement essay
  5. Are Classifications of Accounting Outmoded? essay
  6. The Quantitative Reasoning essay
  7. Real Counting essay
  8. Current Ratio essay
  9. Leeds Offices essay
  10. The Current Account Deficit essay
Close
 
Limited offer
Get 15% off your 1st order
get 15% off your 1st order
Close
  Online - please click here to chat