1. You just received a bonus of ?$1, 000
a. Calculate the future value of $1000, given that it will be held in the bank for 8 years and earn an annual interest rate of 4 percent.
b. Recalculate part ?(a?) using a compounding period that is? (1) semiannual and? (2) bimonthly.
c. Recalculate parts (a?) and (b?) using an annual interest rate of 8 percent.
d. Recalculate part (a?) using a time horizon of 16 years at an annual interest rate of 4 percent.
2. How many years will it take for ?$520 to grow to ?$1,003.74 if? it's invested at 8% compounded? annually?
3. Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of ?$385,000 due in 29 years. In other? words, they will need ?$385,000 in 29 years. Toni? Flanders, the? company's CEO, is scrambling to discount the liability to the present to assist in valuing the? firm's stock. If the appropriate discount rate is 7 percent, what is the present value of the? liability?