Present value and future valuethe following situations, Ask an Expert

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Present Value and Future Value

The following situations require the application of the time value of money:

1. On January 1, 2014, $16,000 is deposited. Assuming an 8% interest rate, calculate the amount accumulated on January 1, 2019, if interest is compounded (a) annually, (b) semi- annually, and (c) quarterly.

2. Assume that a deposit made on January 1, 2014, earns 8% interest. The deposit plus interest accumulated to $20,000 on January 1, 2019. How much was invested on January 1, 2014, if interest was compounded (a) annually, (b) semiannually, and (c) quarterly?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91625221

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