1. Present Value You need to borrow money to finance your four-year university study. You need $20,000 today (i.e. beginning of the first year of studies) and $20,000 at the beginning of the 2 nd, 3rd and 4th years respectively (i.e., you need $20,000 at the beginning of each year of your studies). You will graduate at the end of the 4th year. You will start working immediately after your graduation to pay back your debt. Your first payment towards your debt will be one month after your graduation (i.e., 4 years and 1 month from today). There are two financing options available to you, both of which require an amortization period of 10 years (i.e., loan payments over 10 years) with monthly payments: 1. Government Financing Option: You can borrow from the government student loan service. It does NOT charge interest before you graduate. It starts charging a fixed stated annual rate of 5.50% compounded semi-annually upon graduation (i.e., after the 4th year) 1. Present Value You need to borrow money to finance your four-year university study. You need $20,000 today (i.e. beginning of the first year of studies) and $20,000 at the beginning of the 2 nd, 3rd and 4th years respectively (i.e., you need $20,000 at the beginning of each year of your studies). You will graduate at the end of the 4th year. You will start working immediately after your graduation to pay back your debt. Your first payment towards your debt will be one month after your graduation (i.e., 4 years and 1 month from today). There are two financing options available to you, both of which require an amortization period of 10 years (i.e., loan payments over 10 years) with monthly payments: 1. Government Financing Option: You can borrow from the government student loan service. It does NOT charge interest before you graduate. It starts charging a fixed stated annual rate of 5.50% compounded semi-annually upon graduation (i.e., after the 4th year)