ACCT 3001 Chapter : Chapter 6 Notes
Document Summary
Chapter 6 time value of money: simple interest, interest computed on the principal only. E1a) on january 2, 2012, tomalczyk borrows ,000 for 3 years at a rate of 7% per year. E1b) on march 31, 2012, tomalczyk borrows ,000 for 3 years at a rate of 7% per year. Calculate the interest cost for the year ending. Computes interest on: the principal and interest earned to date (assuming interest is left on deposit), compound interest is the typical interest computation applied in business situations. 31-dec-12 balance - end of year 1 1,120. 31-dec-13 balance - end of year 2 1,254. 40. 31-dec-14 balance - end of year 3 1,404. 93. Table 3 - future value of an ordinary annuity of 1. Table 4 - present value of an ordinary annuity of 1. Table 5 - present value of an annuity due of 1. Number of periods = number of years x the number of compounding periods per year.
