Please answer the following 5 questions; some have multiple parts to each question. You must attempt ALL below.

You borrow $500 and repay $555 in one year. Find the following:

a. PV (Present Value) = _____

b. FV (Future Value) = _____

c. What is the interest period (time)? _____

d. What is the interest rate (need to calculate*)? _____

*hint: use this formula to calculate the interest, FV = PV (1 + k), whereas k is the interest rate.

You lend $1,850 and are repaid $2,078.66 in two years. Find the following:

a. PV (Present Value) = _____

b. FV (Future Value) = _____

c. What is the interest period (time)? _____

d. What is the interest rate (need to calculate*)? _____

*hint: use this formula to calculate the interest, FV = PV (1 + k), whereas k is the interest rate.

What impact does the interest rate have on the PV?

Define both EAR (effective annual rate) AND APR (annual percentage rate)? Is the APR related to the EAR?

In a retail store, a discount is a price reduction. What is a discount in finance? Are the two ideas related?