# What Is the Present Value of Nine Annual Cash Payments of \$4,000, to Be Paid at the End of Each Year Using an Interest Rate of 6%?

Present value calculations. Using a present value table, your calculator, or a computer
program present value function, answer the following questions:
Required:
a. What is the present value of nine annual cash payments of \$4,000, to be paid
at the end of each year using an interest rate of 6%?
b. What is the present value of \$15,000 to be paid at the end of 20 years, using
an interest rate of 18%?
224 Part I Financial Accounting
P6.24.
LO 7, 8, 10
P6.25.
LO 8, 10
c. How much cash must be deposited in a savings account as a single amount
in order to accumulate \$300,000 at the end of 12 years, assuming that the
account will earn 10% interest?
d. How much cash must be deposited in a savings account (as a single amount)
in order to accumulate \$50,000 at the end of seven years, assuming that the
account will earn 12% interest?
e. Assume that a machine was purchased for \$60,000. Cash of \$20,000 was
paid, and a four-year, 8% note payable was signed for the balance.
Use the horizontal model, or write the journal entry, to show   the purchase     of the machine as described above.
How much is the equal annual payment of principal and interest   due at     the end of each year? Round your answer to the nearest \$1.
What is the total amount of interest expense that will be reported   over the     life of the note? Round your answer to the nearest \$1.
Use the horizontal model, or write the journal entries, to   show the equal     annual payments of principal and interest due at the end of each year.