Please answer all 4 problems. Exhibit 5 and 7 mentioned in the problems are listed at the end

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EXHIBIT 5

EXHIBIT 7

Present Value of Amounts Due Assume that you are going to receive $220,000 in 10 years. The current market rate of interest is 12%, compounded annually. a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually. Round to the nearest whole dollar. b. Why is the present value less than the $220,000 to be received in the future? The present value is less due to over the 10 years. Present Value of an Annuity Determine the present value of $220,000 to be received at the end of each of four years, using an interest rate of 5%, compounded annually, as follows: a. By successive computations, using the present value of $1 table in Exhibit 5. Round to the nearest whole dollar. First year Second Year Third Year Fourth Year Total present value b. By using the present value of an annuity of $1 table in Exhibit 7. Round to the nearest whole dollar. c. Why is the present value of the four $220,000 cash receipts less than the $880,000 to be received in the future? The present value is less due to over the 4 years. Present Value of an Annuity On January 1 you win $5,400,000 in the state lottery. The $5,400,000 prize will be paid in equal installments of $540,000 over 10 years. The payments will be made on December 31 of each year, beginning on December 31. If the current interest rate is 8%, determine the present value of your winnings. Use the present value tables in Exhibit 7. Round to the nearest whole dollar. Present Value of Bonds Payable; Discount Pinder Co. produces and sells high-quality video equipment. To finance its operations, Pinder issued $25,000,000 of five-year, 7% bonds, with interest payable semiannually, at a market (effective) interest rate of 9%. Determine the present value of the bonds payable, using the present value tables in Exhibit 5 and Exhibit 7. Round to the nearest dollar. Present Value of $1 at Compound Interest Due Inn Periods Periods 4.0% 4.5% 5% 5.5% 6% 6.5% 79 0.96154 0.92456 0.88900 0.85480 0.82193 0.95694 0.91573 0.87630 0.83856 0.80245 0.95238 0.90703 0.86384 0.82270 0.78353 0.94787 0.89845 0.85161 0.80722 0.76513 0.94340 0.89000 0.83962 0.79209 0.74726 0.93897 0.88166 0.82785 0.77732 0.72988 0.93458 0.87344 0.81630 0.76290 0.71299 0.79031 0.75992 0.73069 0.70259 0.67556 0.76790 0.73483 0.70319 0.67290 0.64393 0.74622 0.71068 0.67684 0.64461 0.61391 0.72525 0.68744 0.65160 0.61763 0.58543 0.70496 0.66506 0.62741 0.59190 0.55839 0.68533 0.64351 0.60423 0.56735 0.53273 0.66634 0.62275 0.58201 0.54393 0.50835 0.64958 0.62460 0.60057 0.57748 0.55526 0.61620 0.58966 0.56427 0.53997 0.51672 0.58468 0.55684 0.53032 0.50507 0.48102 0.55491 0.52598 0.49856 0.47257 0.44793 0.52679 0.49697 0.46884 0.44230 0.41727 0.50021 0.46968 0.44102 0.41410 0.38883 0.47509 0.44401 0.41496 0.38782 0.36245 0.53391 0.51337 0.49363 0.47464 0.45639 0.49447 0.47318 0.45280 0.43330 0.41464 0.45811 0.43630 0.41552 0.39573 0.37689 0.42458 0.40245 0.38147 0.36158 0.34273 0.39365 0.37136 0.35034 0.33051 0.31180 0.36510 0.34281 0.32189 0.30224 0.28380 0.33873 0.31657 0.29586 0.27651 0.25842 19 0.43883 0.42196 0.40573 0.39012 0.37512 0.39679 0.37970 0.36335 0.34770 0.33273 0.35894 0.34185 0.32557 0.31007 0.29530 0.32486 0.30793 0.29187 0.27666 0.26223 0.29416 0.27751 0.26180 0.24698 0.23300 0.26648 0.25021 0.23494 0.22060 0.20714 0.24151 0.22571 0.21095 0.19715 0.18425 0.36069 0.34682 0.33348 0.32065 0.30832 0.31840 0.30469 0.29157 0.27902 0.26700 0.28124 0.26785 0.25509 0.24295 0.23138 0.24856 0.23560 0.22332 0.21168 0.20064 0.21981 0.20737 0.19563 0.18456 0.17411 0.19450 0.18263 0.17148 0.16101 0.15119 0.17220 0.16093 0.15040 0.14056 0.13137 32 0.29646 0.28506 0.27409 0.26355 0.25342 0.25550 0.24450 0.23397 0.22390 0.21425 0.22036 0.20987 0.19987 0.19035 0.18129 0.19018 0.18027 0.17087 0.16196 0.15352 0.16425 0.15496 0.14619 0.13791 0.13011 0.14196 0.13329 0.12516 0.11752 0.11035 0.12277 0.11474 0.10723 0.10022 0.09366 0.20829 0.17193 0.14205 0.11746 0.09722 0.08054 0.06678 0.13796 0.11130 0.08988 0.07265 0.05879 0.04761 0.17120 0.14071 0.11071 0.08720 0.06877 0.05429 0.04291 0.03395 Present Value of $1 at Compound Interest Due in n Periods Periods 8% 10% 11% 1296 139 149 0.92593 0.85734 0.79383 0.73503 0.68058 9% 0.91743 0.84168 0.77218 0.70843 0.64993 0.90909 0.82645 0.75131 0.68301 0.62092 0.90090 0.81162 0.73119 0.65873 0.59345 0.89286 0.79719 0.71178 0.63552 0.56743 0.88496 0.78315 0.69305 0.61332 0.54276 0.87719 0.76947 0.67497 0.59208 0.51937 0.63017 0.58349 0.54027 0.50025 0.46319 0.59627 0.54703 0.50187 0.46043 0.42241 056447 051316 0.46651 0.42410 0.38554 0.53464 0.48166 0.43393 0.39092 0.35218 0.50663 045235 040388 0.36061 0.32197 0.48032 042506 0.37616 0.33288 0.29459 0.45559 0.39964 0.35056 0.30751 0.26974 042888 0.39711 0.36770 0.34046 0.31524 0.38753 0.35553 0.32618 0.29925 0.27454 0.35049 0.31863 0.28966 0.26333 0.23939 0.31728 0.285B4 0.25751 0.23199 0.20900 0.28748 0.25668 0.22917 0.20462 0.18270 0.26070 0.23071 0.20416 0.18068 0.15989 0.23662 0.20756 0.18207 0.15971 0.14010 0.29189 0.27027 0.25025 0.23171 0.21455 0.25187 0.23107 0.21199 0.19449 0.17843 0.21763 0.19784 0.17986 0.16351 0.14864 0.18829 0.16963 0.15282 0.13768 0.12403 0.16312 0.14564 0.13004 0.11611 0.10367 0.14150 0.12522 0.11081 0.09806 0.08678 0.12289 0.10780 0.09456 0.08295 0.07276 0.19866 0.18394 0.17032 0.15770 0.14602 0.16370 0.15018 0.13778 0.12640 0.11597 0.13513 0.12285 0.11168 0.10153 0.09230 0.11174 0.10067 0.09069 0.08170 0.07361 0.09256 0.08264 0.07379 0.06588 0.07680 0.06796 0.06014 0.05323 0.04710 0.06383 0.05599 0.04911 0.04308 0.03779 005882 0.13520 0.12519 0.11591 0.10733 0.09938 0.10639 0.09761 0.08955 0.08215 0.07537 0.08391 0.07628 0.06934 0.06304 0.05731 0.06631 0.05974 0.05382 0.04849 0.04368 0.05252 0.04689 0.04187 0.03738 0.03338 0.04168 0.03689 0.03264 0.02899 0.02557 0.03315 0.02908 0.02551 0.02237 0.01963 0.09202 0.08520 0.07889 0.07305 0.06763 0.06915 0.06344 0.05820 0.05339 0.04899 0.05210 0.04736 0.04306 0.03914 0.03558 0.03935 0.03545 0.03194 0.02878 0.02592 0.02980 0.02661 0.02376 0.02121 0.01894 0.02262 0.02002 0.01772 0.01568 0.01388 0.01722 0.01510 0.01325 001162 0.01019 0.04603 0.03184 0.02209 0.01538 0.01075 0.00753 0.00529 0.03133 0.02069 001372 0.00913 0.00610 0.00409 0.00275 0.02132 0.01345 0.00852 0.00542 0.00346 0.00222 0.00143 Present Value of Ordinary Annuity of $1 per Period Periods 4.0% 5 5.5% 6% 5 6. 7 % 0.96154 1.88609 2.77509 0.95694 1.87267 2.74896 3.58753 4.38998 0.95238 1.85941 2.72325 3.54595 432948 0.94787 1.84632 269793 3.50515 4.27028 0.94340 1839 267301 346511 4.21236 0.93897 1.82063 264848 3.42580 4.15568 003458 1.80802 262432 3.38721 4.10020 445182 5.24214 6.00205 6.73274 743533 8.11090 5.15787 5.89270 6.59589 7.26879 7.91272 5.07569 5.78637 6.46321 710782 772173 499553 5.68297 6.33457 6.95220 491732 5.58238 6.20979 6.80169 7.36009 4.84101 548452 6,08875 6,65610 7.18883 5.38929 5.97130 6.51523 7.02358 753763 8.76048 9.38507 9.98565 10.56312 11.11839 8.52892 9.11858 9.68285 10.22283 10.73955 8.30641 8.86325 939357 9.89864 10.37966 8,09254 8.61852 9.11708 9.58965 10.03758 788687 8.38384 BAS268 929498 9.71225 7.68904 8.15873 8.59974 9.01384 940267 7.49867 7.94269 8.35765 8.74547 9.10791 11.65230 12.16567 12.65930 13.13394 13.59033 11.23402 11.70719 12.15999 12.59329 13.00794 10.83777 1127407 11 68959 12.08532 12 46221 10.46216 10.86461 1124607 11.60765 11.95038 10.10590 10.47726 10.82760 11.15812 11 46992 9.76776 10.11058 1043247 10.73471 11.01851 9.44665 9.76322 10.05909 10.33560 10.59401 14.02916 14.45112 14.85684 15.24696 15.62208 13.40472 13.78442 14.14777 14.49548 14.82821 12.82115 13.16300 13.48857 1379864 14.09394 12.27524 12.58317 12.87504 13.15170 13.41393 11.76408 12.04158 12.30338 12.55036 1278336 11.28498 11.53520 11.77014 11.99074 12.19788 10.83553 11.06124 1127219 11.46933 11.65358 15.98277 16.32959 16,66306 16.98371 1729203 15.14661 1545130 15.74287 16.02189 16.28889 1437519 14.64303 14.89813 15.14107 1537245 13.66250 13.89810 14.12142 1433310 1453375 13.00317 13.21053 13.40616 13.59072 13.76483 12.39237 12.57500 12.74648 12.90749 13.05868 11.82578 11.98671 12.13711 12.27767 1240904 17.58849 17.87355 18.14765 18.41120 18.66461 16.54439 16.78889 1702286 1724676 1746101 15.59281 15.80268 16.00255 16.19290 16.37419 1472393 14.90420 15.07507 15.23703 1539055 13.92909 14.08404 14 23023 1436814 14.49825 13.20063 13.33393 13.45909 13.57661 13.68696 12.53181 1264656 12.75379 1285401 12.94767 19.79277 18.40158 17.15909 16.04612 15.04630 14.14553 13.33171 20.72004 19.15635 1777407 16.54773 15.45583 14.48023 13.60552 21.48218 19.76201 18.25593 16.93152 1576186 14.72452 13.80075 Present Value of Ordinary Annuity of $1 per Period Periods 8% 99% 10% 11% 129 1395 0.92593 1.78326 2.57710 331213 3.99271 0.91743 1.75911 2.53129 3.23972 3.88965 0.90909 1.73554 248685 3.16987 3.79079 0.90090 1.71252 2.44371 3.10245 3.69590 0.89286 1.69005 240183 3.03735 3.60478 0.88496 1.66810 2.36115 2.97447 3.51723 0.87719 1.641666 2.32163 2.91371 3A3308 4,62288 5.20637 5.74664 6.24689 6.71008 448592 5.03295 5.53482 5.99525 641766 4.35526 486842 533493 5.75902 4.23054 4.71220 5.14612 5.53705 5.89923 4.11141 4.56376 4.96764 5.32825 5.65022 3.99755 442261 4.79677 5.13166 5.42624 3.88867 4.28830 463886 4.94637 5.21612 6.14457 7.13896 7.53608 7.90378 8.22424 8.55948 6.80519 7.16073 748690 7.78615 8.06069 649506 6.81369 7.10336 736669 7.60608 6.20652 6.49236 6.74987 6.96187 7.19087 5.93770 6.19437 6.42355 662817 6,81086 5.68694 5.91765 612181 6.30249 6.46238 5A5273 5,66029 5.84236 6.00207 6.14217 8.85 137 9.12164 9.37189 9.60360 9.81815 8.31256 8.54363 8.75563 8.95011 9.12855 7.82371 8.02155 8.20141 8.36492 8.51356 737916 7.54879 7.70162 7.83929 7.96333 6.97399 7.11963 7.24967 7.36578 7.46944 6.60388 6.72909 6.83991 6.93797 7.02475 6.26506 6.37286 6.46742 6.55037 6.62313 s s a szege 33333 xxxxx 33 55 5scs: joes 10.01680 10.20074 10.37106 10.52876 10.67478 9.29224 9.44243 9.58021 9.70661 9.82258 8.64869 8.77154 8.88322 8.98474 9.07704 8.07507 8.17574 8.26643 8.34814 8.42174 7.56200 7.64465 7.71843 7.78432 7.84314 7.10155 7.16951 7.22966 7.28288 7.32998 6,68696 6.74294 6.79206 6.83514 6.87293 848806 10.80998 10.93516 11.05108 11.15841 11.25778 9.92897 10.02658 10.11613 10.19828 10.27365 9.16095 9.23722 9.30657 9.36961 9.42691 8.54780 8.60162 8.65011 8.69379 7.89566 7.94255 7.98442 8.02181 8.05518 7.37167 740856 744120 747009 749565 6.90608 6.93515 6.96066 6.98304 7,00266 11.34980 11.43500 11.51389 11.58693 11.65457 10.34280 10.40624 10.46444 10.51784 10.56682 9.47901 9.52638 9.56943 9.60857 9.64416 8.73315 8.76860 8.80054 8.82932 8.85524 8.08499 8.11159 8.13535 8.15656 8.17550 7.51828 7.53830 7.55602 7.57170 7.58557 7.01988 7.03498 7.04823 7.05985 7.07005 11.92461 10.75736 9.77905 8.95105 8.24378 7.63438 7.10504 12.10840 10.88120 9.86281 9.00791 8.25252 7.66086 7.12322 1223348 10.96168 9.91481 9.04165 8.30450 7.67524 7.13266