WGU D103 Pre-Assessment: Intermediate Accounting I Units 5-7 (JMV1) (PJMV) | Questions with 100% Correct Answers | Verified | Latest Update

A company deposits $10,000 in a bank where it will earn simple interest of 10% annually. What is the amount of interest earned in Year 2? - $1,000 $10,000 x .10 = $1000 A company is putting together a list of transactions that are affected by the time value of money. Which transaction should be included in this list? - Long-term leases A company needs to have $70,000 in cash at the end of four years. The company can invest the cash now in a money market account that will return 6% interest compounded annually. Using a 6% interest rate, the implied annual interest is $70,000 × 0.06 = $4,200. The following information is given: Assuming an annual interest rate of 4% for 6 years is appropriate, the present value of the deposit is $70,000 × 0.79031 = $55,322. Assuming an annual interest rate of 6% for 4 years is appropriate, the present value of the deposit is $70,000 × 0.79209 = $55,446. Assuming an annual interest rate of 6% for 6 years is appropriate, the present value of the deposit is $70,000 × 0.70946 = $49,662. How much does this company need to deposit today? -