If the risk$-$free rate of interest $(r_f)$ is $7\%,$ then you should be indifferent between

receiving $$500$ for sure in one year or which of the following?

a$.$ $$467\mathrm{.}29$ today

b$.$ $$560\mathrm{.}75$ today

c$.$ $$500\mathrm{.}00$ today

d$.$ $$535\mathrm{.}00$ today

e$.$ $$465\mathrm{.}00$ today

f$.$ None of the above

Stella deposits $$5,800$ into a savings account today that pays interest at a rate of $5\mathrm{.}4\%$

per year. If she makes no additional deposits or withdrawals, what will the account

balance of Stella's savings account be in one year's time? $($choose the most appropriate

answer$)$

a$.$ $$8,558$

b$.$ $$5,503$

c$.$ $$313$

d$.$ $$6,113$

You have just made an investment that you believe will generate a positive cash flow of

$$100,000$ five years from now $($at $t=5).$ What is the $t=0$ present value $($PV$)$ of this cash

flow today, assuming the interest rate is $8\%$ per year?

a$.$ $$85,073$

b$.$ $$68,058$

c$.$ $$119,102$

d$.$ $$60,000$