How much do you need to deposit every year

Assignment Help Accounting Basics
Reference no: EM133032946

Question - You can't wait for some travelling after the pandemic ends! Although no one is sure about how long the pandemic will last, you decide to make a deposit at the end of every year in a saving account that earns 3.68% effective annual rate as your travelling fund. Your plan is to save for 5 years, and then go to a different country every year for the next 20 years. You do NOT plan to make additional savings during the years you travel. You pay a travel agency the cost of each trip at the beginning of each travelling year. The first trip will cost you $5,000, with each additional trip costing 2% more because of inflation.

a) How much do you need to deposit every year in order to have enough for your travel plans?

b) If your bank offers you an alternative account that pays an annual percentage rate of 3.64% compounded monthly, should you switch to the alternative account? Justify your answer.

Reference no: EM133032946

Questions Cloud

What is meant by primary behavior pattern : What is meant by primary behavior pattern? Based on your results, what is your behavioral style?
What is the market value of swap contract for Corporation : What is the market value of the swap contract for Corporation A on June 1, 2019, just after the interest payments due on that date have been made
What is meant by primary behavior pattern : What is meant by primary behavior pattern? Based on your results,
Case study on markham hotel : Markham Hotel is considering expanding its meeting facility. The following table shows the 3 alternatives, the states of nature and their payoffs:
How much do you need to deposit every year : You do NOT plan to make additional savings during the years you travel. How much do you need to deposit every year in order
How much will Martt receive each year : The bank has agreed to this arrangement, based on an interest rate of 10% p.a. compounded monthly applied. How much will Martt receive each year
Explain concept of intellectual property : Explain the concept of intellectual property. Explain to Simon how he could protect his intellectual property rights regarding his invention?
Explain departmental income statement : Explain departmental income statement and the criterion for division of indirect costs among departments
Discuss the accounting treatment of the transactions : Discuss the accounting treatment of the transactions and events in accordance with IAS 37: Provision Contingent Liability and Contingent Assets

Reviews

Write a Review

Accounting Basics Questions & Answers

  What was the amount of dividends paid during the year

What was the amount of dividends paid during the year? At the beginning of the year Zoolander Inc. had total assets of $429,000 and total equity of $183,000.

  Determine the price of the bonds remaining to maturity

Twenty-five-year B -rated bonds of Parker Optical Company were initially issued at a 18 percent yield. After 10 years the bonds have been upgraded to Aa2.

  What minimum tax would need to be assessed on shameika

Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates?

  Stein company makes carpets a customer wants to place a

stein company makes carpets. a customer wants to place a special order for 1000 carpets in navy blue with the company

  What information will you and your staff need to analyze

What information will you and your staff need to analyze this investment opportunity? What will be your decision-making process? Discuss and evaluate the different techniques that could be used in capital budgeting decisions.

  Compute breakeven point in units for April

TodoLimpio Company expects to produce 4,500 washers and sell 4,000 washers in April 2021. Compute breakeven point in units for April

  How a public corporation has delivered value for shareholder

How do you measure how a public corporation has delivered value for its shareholders? Use the company that you have selected for your project

  Would prefer to keep accounting records on a cash basis

Would prefer to keep accounting records on a cash basis or an accrual basis? Reflect on the differences between cash basis and accrual basis

  Determine the amount of overhead over or under applied

Alaska Corporation recorded $242,000 of costs related to factory overhead. Determine the amount of overhead over or under applied

  How many dollars should the company budget for total cost

A company is analyzing its mixed costs. During July, its busiest month, a company had total labor hours of 14,000 and total costs of $40,000.

  Calculate the variable overhead spending variance

During August, 163,710 of actual variable overhead cost was incurred for 27.285 machine hours. Calculate the variable overhead spending variance

  Prepare an income statement for the year ended june 30

Prepare a statement of owner's equity for the year ended June 30. No additional investments were made during the year.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd