1. Find the future value (FV) one year from now of a $7,000 investment at a 3 percent annual compound interest rate. Also, calculate the FV if the investment is made for two years.
2. Find the FV of $10,000 invested now after five years if the annual interest rate is 8 percent.a. What would be the FV if the interest rate is a simple interest rate? b. What would be the FV if the interest rate is a compound interest rate?
3. Determine the future values (FVs) if $5,000 is invested in each of the following situations:a. 5 percent for ten years b. 7 percent for seven years c. 9 percent for four years
4. You are planning to invest $2,500 today for three years at a nominal interest rate of 9 percent with annual compounding. a. What would be the future value (FV) of your investment? b. Now assume that inflation is expected to be 3 percent per year over the same three-year period. What would be the investment’s FV in terms of purchasing power? c. What would be the investment’s FV in terms of purchasing power if inflation occurs at a 9 percent annual rate?
5. Find the present value (PV) of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate the PV if the $7,000 is received after two years.