in the next two years, you will receive a $2,000 graduation gift from your parents. a) Calculate the present value of this gift if the appropriate discount rate is 5% compounded annually. b) Calculate the present value if the interest rate is 10% compounded quarterly. 2. If you deposit $1,000 today at the bank at 7% compounded semi-annually, how much will you get in next 15 years? (Calculator & Spreadsheet) 3. How much do you have to save today to buy a $500,000 house in next 12 years? You can earn 14% compounded annually. (Calculator & Spreadsheet) 4. Mr. Saks is 32 years old. He has a 12-year-old son who will go to college at 18 years old. Mr. Saks has to pay $30,000 tuition fee at that time. How much does he need to save today? The interest rate is 14% compounded semiannually. (Calculator & Spreadsheet) 5. Mrs. Masha just got $5,000 birthday gift from her husband. She wants to buy a diamond necklace, which costs $10,500. So she invests today at 7.5% compounded semi-annually. How long would it take her to accumulate enough to get the necklace? (Calculator & Spreadsheet) 6. You have a $1mi. house in Florida. The inflation is expected to be 3.5% annually. You plan to move to a bigger house in 7 years. How much will you get from selling this house at that time? (Calculator & Spreadsheet) 7. You want to double your money in 5 years. What is the rate of return if the interest rate is compounded quarterly? (Calculator & Spreadsheet) 8. You bought stocks from Microsoft for $300,000 two years ago and sold them to your friend today for $450,000. What is your annual rate of return? (Calculator & Spreadsheet) 9. You invest $275,000 today in money market. The appropriate discount rate is 10%. How much will it worth at the beginning of sixth year if the interest rate is compounded annually? Semi-annually? (Calculator & Spreadsheet) 10. Grandpa just gave you $1,000. You will use it to buy a Gucci handbag in next 4 years. If you put it in the bank, you will get 7% compounded annually. If you lend it to your friend, you will get 8% simple interest rate annually. How much are the returns from both alternatives? What alternative will you choose?