Assignment Questions:

1. Determine the fair market value two months from today of the sum of the following payments:

$500 today, assuming it can earn 4% compounded monthly a payment of $1000 two years from today, assuming it can earn 4% compounded monthly

a payment of $500 three months ago, assuming it can earn 4% simple interest

(i). Create a time diagram to help you solve the question. use the labels (1), (2), (3) and (4) to indicate the steps you will use to sovle the problem.

(ii). Solve the question using your time diagram from part (i).

2. Determine the fair market value two months from today of the sum of the following payments: a payment of $600 three months ago, assuming it can earn 3% simple interest $300 today, assuming it can earn 3% compounded monthly a payment of $2000 two years from today, assuming it can earn 3% compounded monthly

(i). Create a time diagram to help you solve the question. use the labels (1), (2), (3) and (4) to indicate the steps you will use to sovle the problem.

(ii). Solve the question using your time diagram from part (i).

3. Determine the fair market value two months from today of the sum of the following payments: a payment of $4500 three months ago, assuming it can earn 5.5% simple interest

a payment of $1500 two years from today, assuming it can earn 5.5% compounded monthly

$600 today, assuming it can earn 5.5% compounded monthly (i).

Create a time diagram to help you solve the question. use the labels (1), (2), (3) and (4) to indicate the steps you will use to sovle the problem.

(ii). Solve the question using your time diagram from part (i).

4. Determine the fair market value two months from today of the sum of the following payments:

$400 today, assuming it can earn 3.5% compounded monthly

a payment of $2500 three months ago, assuming it can earn 3.5% simple interest

a payment of $3000 two years from today, assuming it can earn 3.5% compounded monthly

(i). Create a time diagram to help you solve the question. use the labels (1), (2), (3) and (4) to indicate the steps you will use to sovle the problem.

(ii). Solve the question using your time diagram from part

(i). 5. Determine the fair market value two months from today of the sum of the following payments:

a payment of $6000 two years from today, assuming it can earn 7% compounded monthly

a payment of $500 three months ago, assuming it can earn 7% simple interest

$100 today, assuming it can earn 7% compounded monthly

(i). Create a time diagram to help you solve the question. use the labels (1), (2), (3) and (4) to indicate the steps you will use to sovle the problem.

(ii). Solve the question using your time diagram from part (i)