1. What is the time value of money and why is it so important? (2pts) 2. To what amount will the following investments accumulate? (3 pts) 1. $5,000 invested for 10 years at 10% compounded annually 2. $5,000 invested for 7 years at 8% compounded semi annually 3. $5,000 invested for 12 years at 12% compounded quarterly 3.Suppose you were considering depositing your savings in one of three banks, all of which pay 5% interest. Bank A compounds annually, bank B compounds semiannually, and bank C compounds daily. Which bank would you choose and why? (2pts) 4. In 20 years you would like to have $250,000, but you only have $30,000 currently. At what rate must your $30,000 be compounded annually for it to grow to $250,000 in 20 years? Use a spreadsheet to calculate your answer. (2 pts) 5. You are offered $1,000 today, $10,000 in 12 years or $25,000 in 25 years. Assuming that you can earn 11% on your money, which offer should you choose? Show your work. ( 2 pts) 6. After examining the various personal loan rates available to you, you find that you can borrow funds from a finance company at an APR of 12% compounded monthly or from a bank at an APR of 13% compounded annually. Which option is more attractive. Hint: calculate 1$ invested in each scenario to give you the answer. (2 pts)