1. You are scheduled to receive $41,000 in two years. When you receive it, you will invest it for 8 more years at 5.5 percent per year. How much will you have in 10 years?
2. What is the future value of $300 in 17 years assuming an interest rate of 9 percent compounded semiannually?
3. Consider a two-month call option on a futures contract with a strike price of 140 when the risk-free interest rate is 5% per annum (continuously compounded). The current futures price is 157. What is a lower bound for the value of the futures option if it is (a) European and (b) American?