Question 1

Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations:

5 percent for ten years

Question 2

Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations:

7 percent for seven years

Question 3

Determine the present values if $5,000 is received in the future (i.e., at the end of each indicated time period) in each of the following situations:

9 percent for four years

Question 4

Assume you are planning to invest $5,000 each year for six years and will earn 10 percent per year. Determine the future value of this annuity if your first $5,000 is invested at the end of the first year.

Question 5

Determine the present value now of an investment of $3,000 made one year from now and an additional $3,000 made two years from now if the annual discount rate is 4 percent.

Question 6

Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan's eight-year life. At what amount could this loan be sold for to another bank if loans of similar quality carried an 8.5 percent interest rate? That is, what would be the present value of this loan?

Question 7

Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan's eight-year life. Now, if interest rates on other similar-quality loans are 10 percent, what would be the present value of this loan?

Question 8

Assume a bank loan requires an interest payment of $85 per year and a principal payment of $1,000 at the end of the loan's eight-year life. What would be the present value of the loan if the interest rate is 8 percent on similar-quality loans?