HOMEWORK$*5*$

Please read $-$ Chapter $*8-$ and answer $*$ Questions $*1,4,8$ and $9.$ from Topics$*$forDiscussion$.$

$1.$Explain how$-$interest rates serve as the pricing mechanism for the time value of money. $.$

$4.$ You have two opportunities to invest$-$ $$5,000$ for $10$ years. The first provides a yield of $8\%-$annually, compounded quarterly. The second provides$*$a$*$yield of $8\mathrm{.}5\%.$annually, compounded annually. Which of$.$ these$-$investments provides the higher returns?.By$-$how $*$ much?$$ annual payments of $$400,000$ each. Determine the present value of the contract to $*$ Margaret, assuming. her$-$interest$-$rate$*$is$*10\%.\frac{1}{?}$

$9.$ Suppose that $*$ Margaret $*$ is $*$ able to to reinvest $*$ her $*$ annual $*$ payments $*$ of $$400,000-$in $*$ an $*$ investment $*$ yielding. $10\%*$ per $*$year$.$ How $*$ much $*$ will $*$ she $*$ have $*$ after $*5*$ years? $9$