ACCT 202 - Routh. Summer 2018 (online) Mitchell Mundy & 7/8/18 1:14 PM Test: Exa

Question

ACCT 202 - Routh. Summer 2018 (online) Mitchell Mundy & 7/8/18 1:14 PM Test: Exam (Module 6: ch. 12, 14) 0031:00 Submit Test This Question: 5 pts This Test: 59 pts Janet wants to take the next four years off work to tr depletes her funds to view the present value annuity table) Click the icon to view the present value table ) to view the future value annuity table) (Click the icon to view the future value table) 1. How much money does Janet need now to fund her travels? 2. After checking with a number of banks, Janet learns shell be able to invest her funds o Calculate how much money Janet needs now to fund her travels. (Round your answers to the nearest whole dollar /8/2018 8 9

Explanation / Answer

Requirement 1: if interest is 6%

Funds required now = 29000/1.06 + 29000/(1.06)^2 + 29000/(1.06)^3 + 29000/(1.06)^4

Or we can also use present value annuity factor at 6% for 4 years

= 29000*3.4651=100488fund required now

Requirement 2 if rate is 10%

Then by using present value annuity factor

She need funds now = 29000*pvaf at 10% for 4 years

= 29000*3.1699=91927

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