Answer the following statements true (T) or false (F)
1. The present value of four $10,000 semiannual payments invested for 2 years at 12%
compounded semiannually is $43,746. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use
appropriate factor(s) from the tables provided.)
2. The present value of eight $5,000 semiannual payments invested for 4 years at 8%
compounded semiannually is $33,663.50. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use
appropriate factor(s) from the tables provided.)
3. With deposits of $5,000 at the end of each year, you will have accumulated $38,578 at the
end of the sixth year if the annual rate of interest is 10%. (PV of $1, FV of $1, PVA of $1, and
FVA of $1) (Use appropriate factor(s) from the tables provided.)
4. The future value of an ordinary annuity is the accumulated value of each annuity payment
excluding interest as of the date of the final payment.
1. FALSE
Explanation: 3.4651 is the PV factor on the Present Value of an Annuity table; n = 4; i = 6%
Present Value of an Annuity = Annuity * PV Factor
Present Value of an Annuity = $10,000 * 3.4651 = $34,651.
2. TRUE
Explanation: 6.7327 is the PV factor on the Present Value of an Annuity table; n = 8; i = 4%
Present Value of an Annuity = Annuity * PV Factor
Present Value of an Annuity = $5,000 * 6.7327 = $33,663.50.
3. TRUE
Explanation: 7.7156 is the FV factor on the Future Value of an Annuity table; n = 6; i = 10%
Future Value of an Annuity = Annuity * FV Factor
Future Value of an Annuity = $5,000 * 7.7156 = $38,578
4. FALSE
You might also like to view...
In terms of marketing communications, standardization is:
A) presenting the same message across national boundaries B) a form of adaptation C) new product development D) a new form of the promotions mix
For products in general, the majority of brand choices are made in the store, which means point-of-purchase (POP) materials can have a large impact on the decision
Indicate whether the statement is true or false
Which of the following types of audit evidence is the least reliable?
a. Evidence from the client's organization. b. Evidence derived from a well-controlled system. c. Evidence from independent outside sources. d. Original documents.
Discuss the advantages and uses of secondary data
What will be an ideal response?