Option	Information	Present Value Formula	PV Answer	Do you have enough money?
Example	Calculate the present value of investing in a start-up company if you expect to receive $5,000 in 4 years and the annual market rate is 6%. Remember to use the Present Value factor in your calculation.	$5,000 X .79209	$3,960.45	Yes/No
#1	Buy a bond. The bond pays $3,500 at the end of 2 years with a 12% coupon (interest) paid semi-annually (every 6 months). Calculate the present value of the bond. *Remember there are 4 steps to this analysis (PV of the bond, interest payments, PV of the interest payments, sum of the two PV calculations).
#2	Pay off a loan. The loan is due at the end of 2 years (balloon loan). It has a balance of $4,500 and an interest rate of 11% that accrues annually. The bank said they will take the present value of the loan. Calculate the present value of the loan.
#3	Lend $3,500 to your family for a home renovation. They will pay you $4,500 at the end of the 2 years. The annual market rate is 7%. Calculate the present value of your loan to your family.