1. Which is better, a present value of $100 or a future value of $100 ? Please explain

2. Define and explain two factors that affect the present value of an asset.

3. In five years, what is the future value of $4,000 if the interest rate is 10% and money is compounded montly ? What is the future value if the money is compounded semiannually ?

4. Clark has an investment proposal that invites him to invest $1.000 a year for ten years in a hotel and promises to pay him a return of 11% per year. If Clark agrees, how much will his investment be worth at the end of ten years ?

5. What is the maximum amount of money you should pay for an investment today that is projected to yield $8,000 in four years if the market rate of interest is 12% and the money is compounded semiannually ? What would be the present value if the money is compounded monthly?