Please answer the following questions containing time value problems.

1. An investor purchases a 20-year, $1,000 par value bond that pays semiannual interest of $40. If the semiannual market rate of interest is five percent, what is the current market value of the bond? 2. At the end of the next four years, a new machine is expected to generate net cash flows of $8,000, $12,000, $10,000, and $15,000, respectively. What are the cash flows worth today if a 3% interest rate properly reflects the time value of money in this situation?

3. On January 1, 2015, you are considering making an investment that will pay three annual payments of $10,000. The first payment is not expected until December 31, 2017. You are eager to earn 3%. What is the present value of the investment on January 1, 2015?