Compute the present value for each of the following situations, assuming an interest rate of 10% compounded annually. (Round amounts to the nearest dollar.)
a.A single payment of $30,000 due on a mortgage five years from now.
b.A series of payments of $5,000 each, due at the end of each year for five years.
c.A five year, 10% loan of $25,000, with interest payable annually, and the principal due in five years.
2.Compute the future value amounts (rounded to the nearest dollar) in each of the following situations:
a.A $20,000 lump sum investment today that will earn interest at 10% compounded annually over five years.
b.A $5,000 lump sum investment today that will earn interest at 8%, compounded quarterly to provide money for a child s college education 15 years from now.