# Introduction to Accounting: An Intergrated Approach Chapter 11

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*Levi McArthur graduated with a masters of accountancy degree and has accepted a staff accounting position with a firm; he will receive a salary of \$50,000. The firm guarantees that Levi will receive a 5 to 9 percent raise each year for the next five years depending on his performance. What will Levi's salary be in five years if he gets a 5 percent raise each year? What would his salary be in five years if the annual raise is 9 percent?

P11.2 The Grooms Diner has just purchased a counter and stools for \$45,000. Nick paid \$5,000 down and is going to borrow the remaining \$40,000. The Manhattan National Bank will loan him the money for four years if he agrees to make monthly payments. Lo2

A. What are the monthly payments if the bank charges 5 percent interest?
B. What are the monthly payments if the bank charges 7 percent interest?
C. What are the monthly payments if the bank charges 9 percent interest?

P11.3. **Michael Paul wants to start his own business when he graduates from college in three years and he needs \$600,000 to do so. How much money must he put aside today under the following conditions? Lo2

A. He can earn 8 percent compounded semiannually.
B. He can earn 8 percent compounded annually.
C. He can earn 8 percent compounded quarterly.

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