1.Determine the present value in each of the following situations:
a.A $5,000 loan to be repaid in full at the end of three years. Interest on the loan is payable quarterly. The interest rate is 12% compounded quarterly.
b.A two year note for $8,000 bearing interest at an annual rate of 10%, compounded semiannually. Interest is payable semiannually.
c.A five year mortgage to be paid in monthly installments of $1,000. The interest rate is 12% compounded monthly.
2.Determine the future value in each of the following situations:
a.An investment of $10,000 today to earn interest at 6% compounded semiannually to provide for a down payment on a house five years from now. b.An investment of $25,000 today to earn interest at 8% compounded quarterly that is designated for a charitable contribution 10 years from now when the donor retires.