MEC – 32 REVIEWER

CH 12: LONG TERM INVESTMENTS

Future value of 1 (single cash flow)

𝑟 𝑚𝑇
(1 + 𝑟)𝑛 𝑜𝑟 (1 + )
𝑚

Future value of an ordinary annuity of 1

(1 + 𝑟/𝑚)𝑚𝑇 − 1
[ ]
𝑟/𝑚

Future value of an annuity due of 1

(1 + 𝑟/𝑚)𝑚𝑇 − 1
[ ] (1 + 𝑟/𝑚)
𝑟/𝑚

Gain on life insurance:

Insurance proceeds
received/receivable xx
Less: Sum of cash
surrender value &
and any unexpired/
expired portion of
prepaid insurance/
insurance expense (xx)
xx

CSV – current year xx

Less: CSV – prior year (xx)
Increase in CSV xx
Multiply by: