1. Calculate the present value of each of the following future payments
a. a $10,000 lump sum received 1 year from now if the market interest rate is 8 percent
b. a $10,000 lump sum received 2 year from now if the market interest rate is 10 percent
c. a $10,000 lump sum received 3 year from now if the market interest rate is 5 percent
d. a $25,000 lump sum received 1 year from now if the market interest rate is 12 percent
e. a $25,000 lump sum received 1 year from now if the market interest rate is 10 percent
f. A perpetuity of $500 per year if the market interest rate is 6 percent
2. present value of an income stream
suppose the market interest rate is 10 percent. Would you be willing to lend $10,000 if you were guaranteed to receive $1,000 at the end of each of the next 12 years plus a $5,000 payment 15 years from now? Why or Why not?