b. (1) What's the future value of an initial $100 after 3 years if it is invested in an account paying 10% annual interest? (2) What's the present value of $100 to be received in 3 years if the appropriate interest rate is 10%? c. We sometimes need to find out how long it will take a sum of money (or something else, such as earnings, population, or prices) to grow to some specified amount. For example, if a company's sales are growing at a rate of 20% per year, how, long will it take sales to double? (1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? 3 Years 100 100 100 (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM-EFF%IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 10%/2 5%