INSTRUCTIONS: For each of the statements (or questions) below, in two or three well-written sentences, explain succinctly and cogently why that statement is FALSE (or incorrect). Please focus specifically on what makes the statement WRONG.

9. The formula to find the present value of a $500 payment two years from today, with today's interest rate equal to 4% is........ $500 / (1.04) + $500 (1.04)2 10. Imagine that someone offers you two options: Option 1 is X dollars today; Option 2 is $2000 in 5 years. If the current interest rate is 8%, you would only take Option 1 if the dollars offered today, X is greater than $ 1500