Find the following values. Compounding/discounting occurs annually. Do not round intermediate calculations. Round your answers to the nearest cent.

a. An initial $600 compounded for 10 years at 6%.

$

b. An initial $600 compounded for 10 years at 12%.

$

c. The present value of $600 due in 10 years at 6%.

$

d. The present value of $2,495 due in 10 years at 12% and 6%.

Present value at 12%: $

Present value at 6%: $

e. Define present value.

1. The present value is the value today of a sum of money to be received in the future and in general is less than the future value.
2. The present value is the value today of a sum of money to be received in the future and in general is greater than the future value.
3. The present value is the value today of a sum of money to be received in the future and in general is equal to the future value.
4. The present value is the value in the future of a sum of money to be received today and in general is less than the future value.
5. The present value is the value in the future of a sum of money to be received today and in general is greater than the future value.

-Select-IIIIIIIVVItem 6

How are present values affected by interest rates?

-Select-Assuming positive interest rates, the present value will increase as the interest rate increases.Assuming positive interest rates, the present value will decrease as the interest rate increases.Assuming positive interest rates, the present value will decrease as the interest rate decreases.Assuming positive interest rates, the present value will not change as the interest rate increases.Assuming positive interest rates, the present value will not change as the interest rate decreases.

2..

Find the interest rates earned on each of the following. Round your answers to the nearest whole number.

1. You borrow $720 and promise to pay back $792 at the end of 1 year.

   %

2. You lend $720 and the borrower promises to pay you $792 at the end of 1 year.

   %

3. You borrow $58,000 and promise to pay back $116,659 at the end of 5 years.

   %

4. You borrow $12,000 and promise to make payments of $2,771.70 at the end of each year for 5 years.

   %