Intermediate Accounting 14th Edition

by Kieso, Donald E.; Weygandt, Jerry J.; Warfield, Terry D.

Published by Wiley

ISBN 10: 0470587237

ISBN 13: 978-0-47058-723-2

Chapter 6 - Accounting and the Time Value of Money - Exercises - Page 344: E6-6b

Answer

There will be a deficiency of $301, 062.4

Work Step by Step

Future value of an ordinary annuity of 620,000 at 10% for 15 years: (620,000 X 31.77248) 19,698,937.6 Deficiency = 20,000,000 – 19,698,937.6 = $301, 062.4 **We use the future value tables to obtain the value 31.77248.

Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.