Apply the Time Value of Money in the Following Independent

question 18

Essay

Apply the time value of money in the following independent situations:
1. Margaret Carlson made a deposit in the bank on January 1, 2008. The bank pays interest at the rate of 8% compounded annually. On January 1, 2015, the deposit has accumulated to $40,000. How much money did Margaret originally deposit on January 1, 2008?
2. Claude Cooper deposited $15,600 in the bank on January 1 a few years ago. The bank pays an interest rate of 10% compounded annually, and the deposit is now worth $40,420. For how many years has the deposit been invested?

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Definitions:

Carrying Value

Also known as book value, it is the value at which an asset is recognized in the balance sheet after accounting for depreciation, amortization, and impairment charges.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations of these separate entities as a single economic entity.

Non-Controlling Interest

A portion of equity ownership in a subsidiary not owned by the parent company, which is reflected in the balance sheet.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, and expenses of a parent company and its subsidiaries as a single entity.