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For each of the questions below, draw the time line and compute the present value or future value as required. Show all your work. Write

For each of the questions below, draw the time line and compute the present value or future value as required. Show all your work. Write the formula and show what you plugged in.

  1. Present value of an annuity of 10 payments of $1,000 each starting today at t=0 and ending at t=9 when the interest rate is 10% per year.

  2. Future value of an annuity of 10 payments of $1,000 each, starting today at t=1 and ending at t=10 when the interest rate is 10% per year and the future value is computed for

    t=10.

  3. Future value of an annuity of 10 payments of $1,000 each, starting today at t=0 and ending at t=9 when the interest rate is 10% per year and the future value is computed for t=10.

  4. Present value of an annuity of monthly payments of $100 starting 1 year from now, and lasting for 5 years (60 payments) with an APR of 6% per year with monthly compounding.

  5. Present value of a growth perpetuity that starts 7 years from today, with the first payment of $1,000, a growth rate of 1% per year, and a required rate of return of 9% per year.

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