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Use the following 9% interest factors

Accounting Aug 16, 2020

Use the following 9% interest factors.

Present Value of

Ordinary Annuity

Future Value of

Ordinary Annuity

7 periods

5.0330

9.20043

8 periods

5.5348

11.02847

9 periods

5.9952

13.02104

If $18500 is deposited annually starting on January 1, 2020 and it earns 9%, what will the balance be on December 31, 2027?

$222389

$170209

$185527

$204027

Expert Solution

Computation of Balance on December 31, 2017 using FV Function in Excel:

=-fv(rate,nper,pmt,pv,type)

Here,

FV = Future Value = ?

Rate = 9%

Nper = 8 Years

PMT = $18,500

PV = 0

Beginning = 1

Substituting the values in formula:

=-fv(9%,8,18500,0,1)

FV or Future Value = $222,389

So, Balance on December 31, 2017 is $222,389.

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