1. The ________________________ is the concept that a unit of currency received today is worth more than the same unit of currency received at some future point.

2. The discount rate that brings net present value (NPV) to zero is called the _____________________.

3. Suppose you are planning to run a food truck selling kebabs for two years. If you find a suitable second-hand food truck that is two years old at 2,400,000, and you can expect to sell that truck at the end of two years at 1,200,000, what is your cost for using that food truck. Use 10% as the discount rate and round the answer to the nearest unit and no 1,000 separators. _____________________________

4. How much would I receive if I:

Deposited 100,000 at a bank for one year, and the interest rate was 0.1%? _____________________________

Lent 10,000 to a friend for 3 months and the interest rate was 3%? ____________________

Bought a bond (paying coupons every six months) with 2% coupon rate for 1,000,000 and held it for two years: _______________________________

For all of the questions, round the answers to the nearest unit and no 1,000 separators.

5. What is the discount rate in each case?

Borrowed $99,000 on June 1, 2021 and repaid $100,000 on June 1, 2022: _________________%

Borrowed $99,000 on June 1 2021 and repaid $100,000 on December 1, 2021: ___________________%

Borrowed 895,000,000 on June 1 2021 and repaid 1,000,000,000 on June 1, 2031: ____________________%.

Answers in percentages are to be rounded to three decimal points.

6. What is the interest rate in each case?

Deposited $2,000 at a bank and received $3 in interest one year later: ___________________%

Bought a bond with a face value of $10,000, held it for six months and received a coupon payment of $100 _______________%

Borrowed $100,000 from a bank for three months and paid $500 in interest: _______________________%

Answers in percentages are to be rounded to three decimal points.