Please answer these questions for the course BUSINESS FINANCE 1:

1. Simple Interest versus Compound Interest. First City Bank pays 8 percent simple interest on its savings account balances, whereas Second City Bank pays 8 percent interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Second City Bank account at the end of 10 years? CHAPTER 4 Introduction to Valuation: The Time Value of Money 2. Calculating Future Values. For each of the following, compute the future value: Present Value Years Future Value $ 3,150 8,453 89,305 227,382 5 10 17 20 Interest Rate 18% 6 11 5 3. Calculating Present Values. For each of the following, compute the present value: Present Value Years Interest Rate Future Value 12 4 16 21 4% 9 17 20 $ 15,451 51,557 886,073 901,450 4. Calculating Interest Rates. Solve for the unknown interest rate in each of the following: Present Value Years Interest Rate Future Value $ $ 221 425 25,000 40,200 6 7 18 21 307 905 143,625 255,810 5. Calculating the Number of Periods. Solve for the unknown number of years in each of the following: RE Present Value Years Interest Rate $ 250 1,941 32,805 32,500 8% 5 14 24 Future Value $ 1,105 3,700 387,120 198,212