*****Only #E & F

1. Time value of money is an important concept in understanding firm valuation Display your mastery of the time value of money by answering the following (parts a,b,c,d,e,) a.) A credit card account that charges interest at the rate of 0.75% per month would have an effective annually compounded rate of and an APR of b.) What is the present value of your trust fund if it promises to pay you $85,000 on your 37th birthday (7 years from today) and earns 4% compounded annually? c.) "Give me $10,000 today and I'll return $16,000 to you in five years," offers your investment broker. To the nearest tenth of a percent, what annual interest rate is being offered? d.) How much money would you have to put away at the end of each year to have $1,600,000 when you retire 26 years from now if you can earr 4% on your money? e.) How much can be accumulated if $2,375 is deposited at the end of each month for the next 28 years, if the account earns 4.2% APR (i.e 0.35% per month). f.) Assume the total expense for your current year in college equals $35,000. Approximately how much would you have needed to invest 8 years ago in an account paying 6.0% compounded annually to cover this amount