59% mi us Wed 8:43 pM arks People Window Help Mohamme w eyPLUS Options Would you
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59% mi us Wed 8:43 pM arks People Window Help Mohamme w eyPLUS Options Would you lke to translate itt Nope Translate Never translate Arabic Return to Blackboard Intermediate Accounting, 16e Exercise 6-10 Consider the following independent situations Chns Finley wishes to become a minonare. Hs money market fund has a balance of $86,ssi and has a guaranteed interest rate of 10%, How many must Chns leave that balance in the furd in order to get his desred $725 0007 (Round answer todecimal places e 04) years Assume that Candice Witiams desires to accumulate $775,000 in 15 years using her money market fund balance of $161,978. At what interest rate must Cardces rvestment compound annually? (Round answer to 0 decimal places, eg, s% Interest rate Men Question Attempts: 0 of used SAVIOR LATER 4.Explanation / Answer
Answer 1 Using Future value of sum formula we can calculate the no.of years required. FV = P * (1+r)^n FV = Future value = Required fund value = $775000 P = Present fund balance = $86551 r = interest rate per annum = 10% n = no.of years required = ? 775000 = 86551 * (1+0.10)^n 8.954258 = 1.10^n n = 23 Chris must leave that balance for 23 years in order to get his desired $775000. Answer 2 Using Future value of sum formula we can calculate required interest rate. FV = P * (1+r)^n FV = Future value = Required fund value = $775000 P = Present fund balance = $161978 r = interest rate per annum = ? n = no.of years = 15 775000 = 161978 * (1+r)^15 r = 0.11 Required Interest rate per annum = 11%
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